Galen Stops is back on duty for this week’s In the FICC of It podcast and he and Colin Lambert have a lot to get their teeth into. Starting with a response to Lambert’s question from episode 37 as to why the Cartel were in a chatroom anyway, our podcasters discuss the throwing out of the case against former Barclays’ FX head Robert Bogucki in the US. Staying with that bank, they then discuss a website set up by Barclays’ former head of automated trading David Fotheringhame that is “a public defence of last look”. Listeners will be glad to hear that Lambert doesn’t bang on for too long on one of his favourite subjects, preferring instead to move the conversation onto exchange in FX, with the question, “will scale ultimately win the day?”
In this week’s podcast Colin Lambert and Galen Stops discuss the article penned for Profit & Loss by former FX trader Rohan Ramchandani about his trial and subsequent acquittal for market manipulation. While they generally agree on most points there is, inevitably, areas of disagreement, but that is nothing compared to when they move on (thanks to a quiet news week) to how they ranked each other’s predictions for 2018. The results are available on the website, but why did Stops given Lambert a 6/10 for a bitcoin prediction that was actually correct? And why did Lambert return the compliment given Stops just a 4/10 for his own crypto prediction? All will be revealed in this week’s In the FICC of It podcast, along with exactly which one of them scored the most points with their predictions.
In this Profit & Loss exclusive, Rohan Ramchandani, who was recently acquitted of FX market manipulation by a jury in New York, breaks his silence on the case and gives his perspective on why he believes the prosecution’s arguments were fundamentally flawed.Cast your mind back to 2008. Lehman Brothers collapsed, the financial crisis ensued, causing a global recession, which in turn led to unemployment climbing and house prices falling. People lost their homes. There was public outrage at what happened, aimed primarily at global “bankers” though few understood exactly what role individuals had played. Nonetheless, in the following months, one question in particular recurred in the press, namely “who is being held accountable?” This was to prove the start of a multi-year “anti-banker” campaign provoking regulators and prosecutors to go hunting for blood.
With a reminder to readers that there is still time to vote for a real Irrational – P&L’s Socks of the Year (click here), let’s move onto to the next accolade, the “It’s been a tough year for…” award.
The winner might come as a surprise because I, along with many, feel the FX Global Code has made decent progress this past year and has also done a lot of good for the market by providing a clear framework within which people can work.
Today’s column has a problem with complacency and worries about the chances of future generations forgetting the principles of the FX Global Code the way they did previous best practice documents. Luckily, being a “solutions based” forum, it has an idea that some may find controversial to help ensure that doesn’t happen.
Why is it controversial? How does employing members of the Cartel and other chat rooms – people who have either faced potential jail time or admitted guilt to the authorities – grab you?
In this week’s podcast Colin Lambert and Galen Stops focus in on what seems to be a growing debate about the value and indeed future of the FX Global Code following the acquittal of the three members of the Cartel. Discussing the implications of the jury’s decision and the reaction from the FX industry, regular listeners will not be surprised to hear that our two podcasters manage to disagree over a few aspects of both the case and the debate.
Shortly after we published the news that Richard Usher, Rohan Ramchandani and Chris Ashton, the three members of the now notorious “Cartel” chat room, were found not guilty of FX market manipulation by a New York court last Friday, my phone started buzzing.
Lots of the activity was WhatsApp messages and phone calls from various industry sources wanting to chime in regarding the decision, and one thing that has been interesting in the intervening time is that my sources seem to be split about whether they’re surprised regarding the outcome of the case.
“I know that they only release choice bits of the chat room transcripts to the public, but what came out looked pretty damning to me. I’m surprised that they’ve been able to get out of this one,” opines one market source.
I think it is important that the foreign exchange industry gets one message out at this time and gets it out loud and clear. The type of behaviour exhibited by the members of the Cartel around the start of this decade is not, and will not, be tolerated today or in the future.
To be fair, the members of the Cartel probably understand that today the FX industry is, in conduct terms, a very different place to what it was five years ago.
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.
In this week’s podcast Galen Stops reports from Stockholm on his observations from last week’s Profit & Loss conference in that city, and his interruption by abseiling window cleaners gives Colin Lambert the opportunity to tell his favourite window cleaning story.
On more pertinent topics, they discuss the obvious discord between Sweden’s central bank and local economists and Lambert gives his thoughts on the start of the Cartel trial – stressing the differences between this and the impending appeal of Mark Johnson.
Technology is also in our podcasters cross hairs as they look at blunt instruments to manage market risk and Lambert asks the philosophical questions, ‘Is the market always lagging technology and is this a good thing?’ and ‘at what stage do market participants revert to making the tech work for them rather than have the tech dictate their modus operandi?’
There’s also a quick skip through the latest from the crypto world and Lambert also feels obliged to call out one company for its chaotic start to live under a new moniker, and another for good “spin” around its volume numbers.