FX Cartel traders could not have foreseen criminality of their actions, according to defense counsel
Former FX traders Christopher Ashton, Rohan Ramchandani, and Richard Usher could not have anticipated that what they do is criminal, according to their defense counsel in a case in New York.
Former Forex traders Christopher Ashton, Rohan Ramchandani, and Richard Usher, also known as the “FX Cartel” or “FX Mafia”, on Monday replied to US government’s allegations that insisted that their actions had significant impact on US commerce and that the traders had indeed taken part in bid rigging and price fixing whose effects were not limited to the UK.
In a Reply Memorandum, filed with the New York Southern District Court on Monday, December 18, 2017, the defendants in the case, captioned USA v. Usher et al (1:17-cr-00019), say that the US Government is using empty labels that cannot stand in for factual allegations.
In particular, the government and the ex-traders disagree over whether the FX actions taken by Christopher Ashton, Rohan Ramchandani, and Richard Usher were horizontally or vertically aligned. Whereas the Government seeks to prove that the relations were horizontal, the defendants insist that the defendants’ market roles required them to continually buy and sell from each other in vertical relationships. Hence, according to the defense counsel, the actions of the defendants were not criminal.
The US nexus is also a point of disagreement. The US Government has argued that the actions of the FX traders had direct and foreseeable effects on the United States. But the defendants argue that the Government’s allegations about U.S. counterparties engaging in foreign transactions are insufficient, as foreign effects are not “domestic” even if suffered by US persons.
The US Government had also argued that the traders had “fair warning that price fixing and bid rigging” is illegal. However, the defendants’ counsel notes that the conduct alleged is not “price fixing” or “bid rigging” in any previously recognized sense.
”Indeed, the novel theory of liability here—for conduct that the U.K. declined to prosecute—is precisely why Defendants could not have foreseen that their actions would be criminal”, the defendants argue.
Let’s recall that, according to the US Government, the fraudulent conduct of the defendants can be a violation of UK Law. The March 2016 decision by the UK Serious Fraud Office (SFO) not to prosecute the defendants does not change this fact, says the DOJ. “If anything, it merely demonstrates that foreign enforcement cannot be expected to achieve compliance”, the US authorities note. The DOJ emphasizes that the SFO’ s letter from March 2016 does not state or imply that Defendants did not commit a crime or the investigated charge was baseless.
In their Reply Memorandum from December 18, 2017, the defendants argue that the Government’s argument regarding international comity is also faulty. According to them, it rests largely on the notion that the Court should not “second guess” the Department of Justice.
Christopher Ashton was a EUR/USD trader for the UK affiliate of Barclays PLC from 2011 to 2015. Rohan Ramchandani was a EUR/USD trader for the UK affiliate of Citicorp. from 2004 to 2014. Richard Usher was a EUR/USD trader for the UK affiliate of The Royal Bank of Scotland PLC from 2004 to 2010, and for the UK affiliate of JPMorgan Chase & Co. from 2010 to 2013.
The Indictment alleges that the traders used a chat room to discuss customer trades and risk positions. According to the Indictment, the trio agreed in these discussions that they would “suppress and eliminate competition” in the global FX market through coordinating their bidding, offering, and trading.
