Ex-Deutsche Bank traders seek to exclude evidence about how much money they made

Maria Nikolova

James Vorley and Cedric Chanu argue that the Government should be precluded from telling the jury how much money they made while at Deutsche Bank.

Former Deutsche Bank precious metals traders James Vorley and Cedric Chanu, who stand accused of spoofing in a criminal action at the Illinois Northern District Court, are trying to persuade the Court that evidence regarding their compensation at Deutsche Bank should be excluded from trial. Their arguments were outlined in a document filed with the Court on August 25, 2020.

The defendants say that the government does not advance a plausible reason for telling the jury how much money the defendants made at Deutsche Bank. To the contrary, according to Vorley and Chanu, any points the government wishes to make at trial can be made without introducing the actual dollar value of the defendants’ compensation.

First, the government suggests that defendants’ total compensation “establishes the defendants’ motive and intent to participate in a market manipulation scheme” because “this level of compensation . . . provided strong incentives for defendants to keep their jobs.” Courts have rejected the inference that a well-paid person is more likely than a poorer one to participate in a crime, the defendants explain. And even if the Court allowed the government to make such a suggestion, the government could do so without introducing into evidence the defendants’ total pay, the former traders argue.

The government tries to connect the defendants’ alleged motive to commit fraud (“keeping their jobs”) with their total compensation. But, according to Vorley and Chanu, there is no indication that profits from individual trades had any material impact on their job security, let alone that they risked losing their jobs if they did not engage in fraud. Such an argument would defy common sense, they say.

Next, the government contends that evidence of the defendants’ total compensation “tends to defeat the anticipated defense that traders’ bonuses were unrelated to profitability” because “a bank would not pay an employee huge amounts of money to do things that did not directly help the bottom line.” According to the defendants, this argument is premature because they have not indicated that they will argue that the traders’ bonuses were wholly unrelated to profitability. And in any event, this argument wrongly assumes that evidence of all trading profits is relevant as long as such profits factor into the bonus calculus.

To the extent profitability factored into the defendants’ bonuses, the profits to Deutsche Bank from any given trade (or even all the trades the government intends to offer in summary fashion) would be miniscule compared to the annual profits generated for Deutsche Bank by the defendants, and the impact of any given profit on the defendants’ bonuses would be impossible to measure, the defense argues.

Further, the defendants say the government should be precluded from arguing or presenting evidence purporting to link the defendants’ profits from trades to their bonuses. As the government concedes, “the traders on Deutsche Bank’s precious metals desk did not receive a fixed percentage of their profits,” but rather “their bonuses were determined by several factors.” Given that profits from individual trades somehow factored into the bonus calculus, the impact of any given profit on the defendants’ bonuses would be diluted and impossible to calculate, the defendants say.

Finally, Vorley and Chanu argue that, even with a limiting instruction, compensation evidence would undoubtedly play into a bias against people of wealth, and trigger unwanted negative associations on the part of certain jurors that would infect their view of the evidence.

Read this next

Institutional FX

Euronext reports double-digit growth in FX volume

Pan-European exchange, Euronext has reported a 10 percent rebound in the average daily volume on its spot foreign exchange market. The ADV figure stood at $19.6 billion in January 2022, which is up from December’s $18 billion.

Digital Assets

Voyager subpoenas FTX’s inner circle over Alameda loan

Bankrupt crypto broker Voyager Digital, represented by law firm Kirkland & Ellis, is seeking court approval to subpoena Sam Bankman-Fried’s inner circle, as well as Alameda Research’s former executives.

Retail FX

AvaTrade seals sponsorship deal with F1’s Aston Martin team

Dublin-based forex broker AvaTrade today announced that it has concluded a sponsorship deal with Formula One’s Aston Martin Cognizant team that entails sponsorship rights and other marketing benefits.

Executive Moves

M4Markets onboards Invaxa CEO Marios Antoniou as COO

Seychelles-regulated brokerage firm M4Markets has appointed Marios Antoniou, who has a colorful career within the foreign exchange industry, in the capacity of its Chief Operations Officer.

Digital Assets

GK8 now allows clients to control their digital assets as they would their fiat

“As the institutional market is increasingly turning to self custody, our policy engine empowers them to automate transactions, approvals, and even crucial workflows, while providing the highest degree of security, consistency, governance and control.”

Digital Assets

Retail CBDCs in the UK: “Welcomed” by CryptoUK and R3, but “Dystopian” for ETC Group

“At this stage, we judge it likely that the digital pound will be needed in the future. It is too early to decide whether to introduce the digital pound, but we are convinced preparatory work is justified”, said the BoE and HM Treasury.

Institutional FX

Centroid taps Iress API to provide retail brokers with real-time market data

“It has always been a challenge to have an efficient, elegant solution for market data and order execution for retail brokers, but with Iress we have found absolutely the right partner to add to our client offering.”

Digital Assets

Ramp launches FCA-approved off-ramp product, onboards Brave, Trust Wallet, Ledger

“To obtain and maintain our FCA registration, we must meet and operate within their strict anti-money laundering and counter-terrorist financing standards. This is a huge achievement for us, as compliance is a cornerstone of our business and what we stand for.”

Institutional FX

State Street launches FIX API for Fund Connect ETF platform

“Expanding from proprietary APIs to the FIX industry standard will bring us closer to our goal of 100% digital interactions. This is another example of innovations we’ve brought to our operating model as we celebrate 30 years of servicing ETFs since the launch of SPY.”

<