Akshay Aiyer, a former FX trader at JP Morgan in New York, has been sentenced to serve eight months in jail and ordered to pay a $150,000 criminal fine for his participation in an antitrust conspiracy to manipulate prices for emerging market currencies in the FX market.
Aiyer was found guilty late last year by a jury in New York, who found that he had conspired to manipulate central and eastern European, middle eastern and African (CEEMA) markets, prices and spreads to clients as a participant in several Bloomberg chat rooms. Two of his counterparts in the chat rooms, former Standard Bank, Barclays, BNP Paribas and ANZ trader Jason Katz, and Christopher Cummins at Citi, previously pleaded guilty to the charges and agreed to help the prosecution of Aiyer in return for a more lenient sentence.
“Today’s sentence, including prison time, serves as yet another reminder of the consequences for those who cheat and compromise the integrity of the global financial markets,” says assistant attorney general Makan Delrahim of the Department of Justice’s Antitrust Division. “This case, which the Antitrust Division litigated, is another step forward in the department’s ongoing commitment to prosecute and deter cartels in the financial markets that harm American consumers.”
FDIC inspector general Jay Lerner adds, “Today’s sentencing demonstrates the gravity of the defendant’s egregious behaviour to manipulate emerging market currencies, as well as the importance of bringing him to justice. This extensive conspiracy represents a serious breach of trust with both his clients and the major multinational bank for whom he worked. We appreciate the cooperation of our law enforcement partners, and we remain committed to investigate such unscrupulous crimes that impact the integrity of our banking sector.”
According to evidence presented at trial, the defendant engaged in near-daily communications with his co-conspirators by phone, text, and through an exclusive electronic chat room to coordinate their trades of the CEEMEA currencies in the FX spot market. The jury heard evidence that the defendant and his co-conspirators manipulated exchange rates by agreeing to withhold bids or offers to avoid moving the exchange rate in a direction adverse to open positions held by co-conspirators and by coordinating their trading to manipulate the rates in an effort to increase their profits. By agreeing not to buy or sell at certain times, the conspiring traders protected each other’s trading positions by withholding supply of or demand for currency and suppressing competition in the FX spot market for emerging market currencies. They also heard evidence that the defendant and his co-conspirators took steps to conceal their actions by, among other steps, using code names, communicating on personal cell phones during work hours, and meeting in person to discuss particular customers and trading strategies.
The charges against Aiyer did carry a maximum penalty of 10 years in jail and a $1 million fine – the outcome may be pertinent as two members of the so-called “Cartel” face further legal action in the US, this time from the Office of the Comptroller of the Currency. If the case goes to trial it is expected to start in 2021.