A former senior foreign exchange (forex) trader at Barclays Plc, who was accused of criminal market manipulation, was acquitted by a United States judge on Monday, with the charges tossed before the case could go to a jury.
In a rare instance of a case being shut down so quickly, the acquittal of Robert Bogucki, the former head of Barclay’s FX trading desk in New York, was given by U.S. District Judge Charles Breyer in San Francisco.
The case was tossed as the judge determined that the US options markets aren’t government by clearly defined rules of trust, but are instead more like a poker game in “the Wild West,” a move which has set back federal efforts to hold senior bankers and traders accountable for suspected market misconduct.
Specifically, Bogucki, whose trial commenced on February 21st, was charged with “front-running” a transaction made in 2011, which involved the sale of £6 billion (around $8 billion) worth of cable options that were linked to Hewlett-Packard Co’s purchase of Autonomy Corp., a UK software company.
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The former Barclays FX trader was accused of attempting to push down the options’ price, which allowed Barclays to profit at HP’s expense, prosecutors alleged. Furthermore, an indictment quoted Bogucki of warning a trader to not let “some loose-lipped market monger” tell HP what they were doing.
Robert Bogucki Did Not Owe HP a Duty of Trust, Judge Finds
However, Breyer stated that a reasonable jury would not be able to find that Bogucki owed HP a duty of trust and confidence and that his actions were rather in line with industry practices, along with other factors, which meant that an acquittal was necessary.
“The government has pursued a criminal prosecution on the basis of conduct that violated no clear rule or regulation, was not prohibited by the agreements between the parties, and indeed was consistent with the parties’ understanding of the arms-length relationship in which they operated,” Breyer wrote.
“The court cannot permit this case to go to the jury on such a basis,” he added.
Another Setback for US Prosecutors
The events on Monday were not the first setback for US prosecutors. As Finance Magnates reported, three former forex traders based in London were accused of rigging FX rates. However, a Manhatten federal jury found them not guilty in October.