are poised to charge the currency traders at the heart of one of the biggest U.S. market-rigging investigations, according to people familiar with the matter.
The imminent criminal charges are against members of ‘The Cartel’ chat group, the people said. These traders used instant messages to coordinate the rigging of foreign-exchange benchmarks by sharing confidential customer information, prosecutors have said in antitrust cases that led to guilty pleas by five banks in 2015.
The senior dealers who participated in The Cartel were Richard Usher, formerly of JPMorgan Chase & Co., Rohan Ramchandani, formerly of Citigroup Inc. and Chris Ashton, formerly global head of spot trading at Barclays Plc. Another member, Matt Gardiner, formerly of UBS Group AG, has been helping prosecutors build cases against the traders, people familiar with the matter have told Bloomberg News.
Lawyers for Ashton, Gardiner and Ramchandani declined to comment. Usher’s lawyer didn’t immediately respond to phone and e-mail requests for comment.
The men are located outside of the U.S., meaning they would have to be extradited, a process that can take months, if not years. They are probably going to fight back against the charges, one of the people said.
Justice Department spokesman Mark Abueg declined to comment.
The charges would make good on the government’s long-running promise it would hold individuals to account in the case. As far back as September 2014, then-Attorney General Eric Holder said charges against traders were imminent. Those efforts were hampered by issues of evidence and lack of cooperators, people familiar with the matter told Bloomberg last year. Now some prosecutions are moving forward. Over the past six months, two currency traders were charged and a third pleaded guilty to rigging allegations.
This summer, Gardiner and Ashton were banned from the U.S. banking industry for life by the Federal Reserve, which also imposed a $1.2 million fine on Ashton.
The Obama administration, which is pressing to wrap up investigations before its term ends on Jan. 20, has stressed the importance of holding individuals accountable for corporate crime as opposed to solely reaching settlements with companies. Since the fall of 2015, the department has been operating under a policy that requires all investigations of company misconduct begin and end with a focus on charging individuals.
Citigroup Inc., Barclays Plc, JPMorgan Chase and Royal Bank of Scotland Group Plc pleaded guilty in May 2015 to conspiring to rig currency rates. UBS received immunity from prosecution in the currency case, but its conduct breached an earlier agreement over its role in manipulating benchmark interest rates.
A federal judge in Connecticut urged the Justice Department to pursue individuals in the exchange-rigging cases during the banks’ Jan. 5 sentencing.
"Mischief will be best deterred if the people responsible are not only fired but that any compensation made to them that was triggered by the wrongful conduct, for example bonuses, are clawed back or disgorged," U.S. District Judge Stefan R. Underhill said. "Frankly I would encourage the government to consider prosecution of individuals.”
The Cartel chatroom ran from at least December 2007 until January 2013, prosecutors have said in court papers. That chatroom was limited to specific euro/dollar traders, they said. Many conversations took place just before daily fixes -- the brief windows of time when data providers take a snapshot of trading so they can set daily rates.
Persuading a jury to convict the men may be hard, people familiar with the investigation have said. One issue is whether the online chatroom conversations conclusively show clear agreements between them to rig currency prices -- a necessary element to prove any price-fixing case -- one of the people said. Messages in which traders allegedly discussed attempts to move the market don’t always correspond with actual trades or price movements, and prosecutors would have to translate for jurors the complexities of the currency market and trader jargon.01/10/2017