US govt and “Cartel” traders clash over case materials in Forex manipulation suit

Maria Nikolova

Former “Cartel” traders call case materials volume staggering: 1,400 hours of untranscribed audio recordings; 375,000 chats, emails, and attachments; and trading data from several banks comprising several tens of millions of transactions.

One of the most widely followed FX manipulation cases – that brought by the US government against Richard Usher, Rohan Ramchandani, and Christopher Ashton of the so-called “Cartel” or “Mafia”, has seen the plaintiffs and the defendants disagree over the so-called “bill of particulars”. The “bill of particulars” is a typical means to get information about a claim or defense. It represents a list of written questions from one party to another asking for details (particulars) about a claim or defense.

Earlier this month, the defendants sent a letter for such a bill of particulars, asking for a “a list of the trades, bids, and offers (and corresponding communications, e.g., call or chatroom passage on that day) that the government intends to rely upon at trial.”

The response from the US government was a bit stark. It argued that the law forbids Defendants from using a bill of particulars to “get a preview of the Government’s trial evidence or legal theories”. Instead, the government has committed to provide an early trial exhibit list, which will also specify the particular instances of alleged collusive trading and means of communication. The government has committed to providing this 60 to 90 days prior to trial.

The defendants did not agree with the government’s proposal and today addressed the New York Southern District Court, asking it to intervene.

“Our interest is simply to obtain the requested particulars as soon as possible, given the enormity of data in this case and the trial date”, the defendants argue in their letter, seen by FinanceFeeds.

The discovery produced thus far (with more to come) is seen as staggering in scope: 1,400 hours of untranscribed audio recordings; 375,000 chats, emails, and attachments; and trading data from several banks comprising many millions (and likely several tens of millions) of transactions.

The defendants also stress that the indictment fails to identify even a single allegedly criminal transaction. This way, according to the ex-traders, they are forced “to labor in mystery as to which trades – from a mass of literally millions – are allegedly criminal, until its production of trial exhibits 60 to 90 days before trial”.

In response to the letters from the plaintiffs and the defendants, the Court has ordered the parties to meet and confer on September 6, 2017.

The indictment from January this year charges Richard Usher (former Head of G11 FX Trading-UK at an affiliate of The Royal Bank of Scotland plc, as well as former Managing Director at an affiliate of JPMorgan Chase & Co.), Rohan Ramchandani (former Managing Director and head of G10 FX spot trading at an affiliate of Citicorp) and Christopher Ashton (former Head of Spot FX at an affiliate of Barclays PLC) with conspiring to fix prices and rig bids for US Dollars and Euros in the FX spot market.

The ex-traders are alleged to have conspired through telephone calls and electronic messages, including conversations in a private electronic chat room. The anticompetitive behavior includes colluding around the time of certain benchmark rates known as fixes, such as coordinating their orders and trading to manipulate the price of the currency pair by the time of the fix.

On July 17, 2017, the trio entered “not guilty” pleas.

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

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