Richard Usher, Rohan Ramchandani and Chris Ashton, the three members of the now notorious “Cartel” chat room, have been found not guilty of FX market manipulation by a jury in New York.
It was alleged that between 2007 and 2013 Usher, Ramchandani and Ashton worked in coordination to fix prices and rig EUR/USD markets, participating in telephone calls and electronic messages, including near-daily conversations in a private electronic chat room, in order to achieve this. The indictment against them was issued in January of this year.
If found guilty the three could have each faced a maximum penalty of 10 years in prison and a $1 million fine.
However, after less than a day of deliberation, the jury at a Manhattan federal court returned a verdict of not guilty.
Although all three men are citizens and residents of the United Kingdom, they reached an agreement with the US government to waive extradition earlier this year.
The decision is widely seen as a blow to the US Department of Justice’s (DoJ) efforts to bring individuals to account for conduct that cost banks more than $10 billion in fines. Previously the DoJ has won convictions against traders for manipulating Libor, however those individuals were facing charges of fraud, whereas the Cartel were prosecuted under antitrust laws.
“The jury has clearly bought the argument that what these guys were doing was nothing unusual at that time,” says a senior banking source. “The expectations around, and framework of, conduct, has changed since then, however, so while their activities have been found to not be illegal, they would not be tolerated in today’s FX market.”
Another banking source expresses surprise at the verdict, saying, “After [Mark] Johnson was found guilty I couldn’t see how these three could face anything other than a guilty verdict, but it goes to show you how complex these matters are. It does raise the question, if it is OK for these three traders to exchange information and pre-hedge fix orders in 2011, why is what Johnson did wrong?”
In a statement to reporters after the verdict, Sara George, lawyer for Ashton, said, “This case should never have been brought. Dozens of traders lost their jobs and simply billions of pounds of fines were paid by British banks including taxpayer-owned British banks for something that did not happen.”