Articles tagged by Cartel
I have a lot of respect for the Federal Reserve and the people that work there, but I have to ask: is it just another example of a dysfunctional regulatory framework?
News that Chris Ashton, the former Barclays FX trader dismissed by the bank over misconduct allegations, has lost his claim for unfair dismissal represents the first outright win for a bank facing such a claim and, potentially, draws a line in the sand over how participation in foreign exchange chat room activities is viewed.
Bloomberg News reports that Ashton lost his claim in a ruling dated September 19 as the judge found Barclays took “appropriate action” due to his “gross misconduct”.
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 Christ Ashton with conspiring to fix prices and rig bids for US dollars and euros exchanged in the FX spot market.
This is very short and sweet and to the point.
We continue to hear people express concerns over how the Global Code of Conduct is going to be implemented and how adherence can be assured.
It’s simple. As an addendum to every copy of the Code, that should be attested to by every participant in the wholesale foreign exchange market, there should be attached a copy of yesterday’s US Department of Justice’s indictment of three former members of the Cartel.
A second New York-based FX trader has pleaded guilty to colluding to manipulate markets.
Chris Cummins, a former emerging markets trader for Citi in New York, pleaded guilty to misconduct between approximately January 2007 and July 2013, according to the US Department of Justice. Earlier this month, Jason Katz, a former EM trader at a number of banks accepted guilt over the same charges.
Last week the DoJ also indicted three members of the Cartel chatroom on similar charges and is expected to commence extradition proceedings soon as it ramps up its efforts to bring individuals to justice over the FX manipulation scandal.
Court documents filed in New York this week indicate that three members of the notorious “Cartel” chat room have agreed to extradition to the US to be arraigned on charges of conspiracy to rig FX markets.
In a letter, the US Department of Justice (DoJ) states, “We are writing to confirm that each of the three defendants in the above-referenced case – Richard Usher, Rohan Ramchandani, and Christopher Ashton – have agreed to voluntarily appear before the Court on the charge brought against them by indictment in January of this year.
It wouldn’t be the modern day FX market if the year didn't kick off with legal issues and 2018 is no different. What is different this year is that they could, conceivably, pull the curtain down on a sorry saga and provide critical direction on two grey areas in the industry.
There have been regulatory fines handed down regarding last look but as far as I can tell a case currently being heard in London is the first where an employee is claiming they were dismissed largely because of their use of the practice.
More than a few people have told me in recent weeks that they see the trial (which is now at the appeal stage) of Mark Johnson, and that of the Cartel threesome – which started this week in New York – as being inextricably linked. You all know what’s coming…I don't agree. In fact I would argue there are some fundamental differences that mean this week’s trial – complex as it is – cannot be seen through the same lens.
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.
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.
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.
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.
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.
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?
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.
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.
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.
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?"