The US Department of Justice has announced that a Federal grand jury has returned an
indictment against three members of the infamous Cartel chat room that
allegedly conspired to manipulate FX markets.
The one-count indictment, filed in the US District Court for the Southern District of New
York, charges former RBS trader Richard Usher, ex-Citi head of spot FX Rohan
Ramchandani and former Barclays trader Chris Ashton with conspiring to fix prices and rig bids for US dollars and euros exchanged in the FX spot market.
“Whether a crime is committed on the street corner or in the corner office, no one gets a
free pass simply because they were working for a corporation when they broke
the law,” says deputy attorney general Sally Yates. “Today’s indictment
reiterates our commitment to holding individuals accountable for corporate misconduct.”
Principal deputy associate attorney general Bill Baer, adds, “The charged conspiracy
involved competitors manipulating the exchange rate for the hundreds of
billions of dollars traded on foreign exchange markets for their benefit and to
the detriment of their customers. We previously secured criminal convictions of
the financial institutions involved in the misconduct. Today we seek to hold
accountable the individuals who conspired on their behalf.”
The indictment follows the May 20, 2015 agreements of Barclays, Citi, JPMorgan, and
Royal Bank of Scotland to plead guilty to conspiring to manipulate FX markets,
and to pay criminal fines totaling more than $2.5 billion. Last
week the Federal district court in Connecticut accepted those plea agreements
and sentenced the banks accordingly.
“These former bank traders are alleged to have gained an unfair advantage on their
counterparts by committing corporate fraud involving the manipulation of the
foreign currency exchange,” says assistant director in charge Paul Abbate of
the FBI’s Washington Field Office. “Their actions affected worldwide
trading positions in the global marketplace. Today’s announcement reinforces
the FBI’s commitment to investigate and prosecute individuals responsible for
criminally interfering with the global financial markets.”
The charge in the indictment carries a maximum penalty of 10 years in prison and a $1
million fine. The maximum fine may be increased to twice the gain derived from
the crime or twice the loss suffered by victims if either amount is greater
than $1 million.
According to the indictment, from at least December 2007 through at least January 2013,
Usher, Ramchandani and Ashton (along with unnamed co-conspirators) conspired to
fix prices and rig EUR/USD markets. Called “the Cartel” or “the Mafia,” the DoJ
says this group of traders participated in telephone calls and electronic
messages, including near-daily conversations in a private electronic chat room,
to carry out their conspiracy. “Their anticompetitive behavior included
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,” DOJ alleges. “In another example of collusion,
the conspirators coordinated their orders and trading to manipulate the price
of the currency pair, such as by refraining from entering orders or trading at
These charges now mean the DoJ has charged six individuals in the FX investigation, following
those laid against HSBC’s former head of FX trading Mark Johnson and head of
EMEA trading Stuart Scott as well as Jason Katz, who
pleaded guilty last week to manipulation charges.
Although the DoJ has acquired the indictments it now has to start extradition charges
against the three men, who are believed to live in the UK.