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Articles tagged by DoJ

State Street to Pay $530m to Settle FX Fraud Allegations It was announced today that State Street expects to pay a total of $530 million to resolve FX fraud allegations levelled against the bank. The US Department of Justice (DoJ) issued a statement today saying that State Street has agreed to ...
FX Trader Arrest: Do Not Pass Go, Do Not Collect $8m Two UK-based FX traders have been charged with wire fraud by the US Department of Justice, one of which has been arrested in New York. Galen Stops reports on the case. On July 19, Mark Johnson, the head of global FX cash trading at HSBC, was arrested at New York’s JFK airport in connection with an ongoing investigation by the US Department of Justice (DoJ) into currency rigging. Two days later, the DoJ officially brought charges against Johnson and Stuart Scott, former head of FX cash trading for EMEA at HSBC, for wire fraud.
Cartel Members Indicted in US 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.
Cartel Traders Agree to US Extradition 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.
HSBC’s Execution of Cairn Order “Followed Standard Industry Practice” Documents lodged by the team representing HSBC’s former global head of FX trading, Mark Johnson, in his defence against market manipulation claims, indicate that should a defence case be needed it will focus on proving that the bank – and Johnson’s conduct – was in line with standard industry practice. Johnson and former head of EMEA FX trading Stuart Scott have been charged by the US Department of Justice with allegedly front running a large fix order from Cairn Energy.
DOJ Hands HSBC $101.5m Fine for Front Running HSBC has been fined $101.5 million for front running client orders, the US Department of Justice (DOJ) announced today. The bank has entered into a deferred prosecution agreement (DPA) and agreed to pay a $63.1 million criminal penalty and $38.4 million in disgorgement and restitution to resolve charges that it engaged in a scheme to defraud two bank clients through a multi-million dollar scheme commonly referred to as “front running”. The DPA, which was filed in connection with a two-count criminal information charging wire fraud in the United States District Court for the Eastern District of New York, is pending review by the court.  
And Another Thing... There's a lot of noise about the latest front running accusations in FX world, with people talking excitedly about a fundamental change in how the market operates, but it strikes me that the changes these people talk about have already happened. Does any one really carry risk any more? Aren't targets expressed not in P&L terms but in fees generated and market share (which is itself a quasi fee)? Nothing is going to change - including the lawyers getting rich at the industry's expense!
Former JPM FX Trader Indicted in US The US Department of Justice has announced it has brought an inductment against former JP Morgan EM FX trader Akshay Aiyer for his role in alleged FX market manipulation. Aiyer is specifically charged with conspiring to fix prices and rig bids and offers in Central and Eastern European, Middle Eastern, and African (CEEMEA) currencies. According to the indictment, from at least as early as October 2010 through at least July 2013, Aiyer, along with other New York-based CEEMEA traders working for rival banks, participated in a conspiracy designed to suppress competition in order to increase each trader’s profits and decrease each trader’s losses.
US Regulators Shift Attitudes Regarding Cryptocurrencies Speaking at Profit & Loss Forex Network New York, Mike Gill, chief of staff to US Commodity Futures Trading Commission (CFTC) chairman, Christopher Giancarlo, and the CFTC’s COO, provided a fascinating look at how attitudes towards cryptocurrencies have changed in Washington recently. Gill revealed that the CFTC received significant criticism within the walls of government last year for its approach to cryptocurrencies, such as bitcoin, which the agency allowed two exchange groups to list futures on at the end of last year. The reason for this criticism, he said, was concerns about money laundering and illicit activity linked to bitcoin and other cryptocurrencies.
What Next for Crypto Regulation? A Washington Insider’s View..... Profit & Loss’s latest OnTheBlock series featured a one-one-one discussion with former CFTC staffer Justin Slaughter, now a partner at Mercury Strategies, in which he provided an insider’s perspective on how cryptoassets are being viewed by regulators in Washington, DC. P&L OnTheBlock: An SEC official recently said that the agency does not  view ether[eum] as a security. Does this mean that the issue is settled and the SEC definitely won’t try and regulate it as a security now?  Justin Slaughter: What we are basically hearing is that there isn’t an explicit, major problem with ether as a security. They are not yet saying it's totally, absolutely, not a security.
CFTC, DoJ Charges Former Tower Traders Over Spoofing The US Commodity Futures Trading Commission (CFTC) has issued an Order filing and settling charges against Kamaldeep Gandhi, in which Gandhi admits to engaging in manipulative and deceptive schemes, along with other individuals, which involved thousands of acts of spoofing with respect to a variety of futures products traded on the Chicago Mercantile Exchange, Chicago Board of Trade, New York Mercantile Exchange, and the Commodity Exchange (Comex). At the same time the US Department of Justice (DoJ) charged Gandhi and two alleged co-conspiritors, Bruce Mao and Krishna Mohan, with spoofing offenses and says Gandhi and Mohan have admitted to the charges.
What to Make of the Cartel Acquittal? 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.
And Another Thing... I have previously argued that the FX industry needs to pay attention to the outcome of the Mark Johnson trial. Reading through the appeal documents, however, indicates the stakes have been raised. The prosecution's original case was, in my opinion, flawed when looking at how the FX market works, but the new charges take this to a new level and they throw into a harsher light the reluctance of certain trade associations to engage and educate the US authorities earlier in this case - we can only hope it is not too late.
In the FICC of It There’s something for everyone in this week’s In the FICC of It podcast as Colin Lambert and Galen Stops traverse the US legal system, trading, crypto and China. Listen in as Lambert explains why he is mystified at the prosecution’s flip-flop in the Mark Johnson case and angry at the FX industry’s previous lack of effort to explain how markets work to the US legal authorities; and Stops takes a look at a new report n his favourite industry – CTAs. Having had the data explained to him, Lambert also thinks he knows why some CTA sectors are doing well and some aren’t, so that’s another of his “theories” then… Our podcasters then move onto debate whether crypto markets will evolve to an OTC model and whether this would be a good thing for attracting institutional money to what is still a relatively nascent market. Stops closes out by reporting from an analysts’ briefing this week that highlighted a change in approach on the part of China to its programme of liberalisation of the yuan.