“FX Cartel” traders request declaration of mistrial due to prejudicial testimony

Maria Nikolova

Defendants’ counsel says the testimony of the Government’s star witness Matthew Gardiner is highly prejudicial.

As the trial of Richard Usher, Rohan Ramchandani, and Christopher Ashton, the former Forex traders also known as “FX Cartel” or “FX Mafia” progresses at the New York Southern District Court, the tensions are on the rise, especially due to the testimony of the Government’s chief cooperating witness Matthew Gardiner.

On Wednesday, October 17th, the counsel for the defendants filed a Letter with the Court, requesting the declaration of a mistrial.

The Letter explains that the government has elicited from Gardiner testimony regarding:

  • (a) employment actions taken against individuals; and
  • (b) an enforcement action that the Federal Reserve Board (FRB) took against Gardiner several years after the end of the charged conspiracy.

According to the defense, these lines of testimony contravene Federal Rules of Evidence 403, the rules against hearsay, the Confrontation Clause, and the rule against impermissible lay opinion testimony.

“Unfortunately, with this highly prejudicial line of questioning, the government has created irreparable prejudice that necessitates the declaration of a mistrial”, the defense argues.

During his cross-examination, Gardiner testified that the types of information-sharing about which he spoke on direct were “prevalent” in the FX market. The government elicited from him that three of the individuals about whom he had testified on cross-examination, in addition to the defendants, had been fired by their employers as a result of internal investigations conducted by their banks. The government elicited further that the number of traders who were fired or suspended around that time “went sort of north of 50/55.”

Following that, the government elicited testimony that the FRB imposed on Mr. Gardiner, by consent decree, “a lifetime ban based upon his conduct with the defendants.”

The defense finds this testimony as problematic because it is seen to suggest to the jury that large banks, as well as the FRB, have already deemed certain relevant conduct impermissible. However, these entities are not the finders of fact. They did not implement the applicable law, procedures, or standard of proof that govern this trial. Their views should play no role in the jury’s deliberations, the defense argues.

Moreover, the defense notes that the adverse actions discussed in the redirect testimony occurred years after the conduct at issue in the instant case and reflect after-the-fact judgments of the FRB and various banks regarding certain practices. These actions are said to have no bearing on the defendants’ contemporaneous intentions and perceptions during the time period relevant to the charges.

The redirect testimony inflicts unfair prejudice that no curative instruction could cure, the defendants argue. Forgetting and disregarding this testimony would require jurors to perform ‘mental acrobatics.’ That is why, a mistrial is necessary.

Should the Court decline the defendants’ application for a mistrial, however, the defendants respectfully request that the Court: (a) strike the redirect testimony from the record; and (b) instruct the jury: (i) that no euro-dollar traders have been charged with antitrust offenses in the United States; (ii) that employment-related and administrative actions are entirely different from criminal liability; and (iii) that the jury may not consider any evidence of such actions in its deliberations.

The case is captioned USA v. Usher et al (1:17-cr-00019).

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