Criminal Charges Loom for Currency-Rigging Cartel

Members of 'The Cartel' used instant messages to coordinate the rigging of foreign-exchange benchmarks.

The currency traders at the centre of one of the biggest US market-rigging investigations are set to be charged, as per a Bloomberg report today. The criminal charges are against members of ‘The Cartel’ chat group who used instant messages to coordinate the rigging of foreign-exchange benchmarks by sharing confidential customer information, leading to guilty pleas by five banks in 2015.

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The Cartel comprised of senior dealers including Richard Usher, previously with JPMorgan Chase, Rohan Ramchandani, ex-Citigroupת and Chris Ashton, the former global head of spot trading at Barclays who was banned and fined $1.2 million by the Federal Reserve Board last year.

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A further member, Matt Gardiner, formerly of UBS Group and also banned by the Federal Reserve Board, has been assisting prosecutors with the case against the traders while a third member of the group, Jason Katz, has pleaded guilty to rigging allegations, as reported by Finance Magnates earlier this month.

The Obama administration, which is seeking to conclude investigations before its term ends on 20 January, has stressed the importance of holding individuals accountable for corporate crime and has been operating under a policy that requires all investigations of company misconduct to begin and end with a focus on charging individuals.

Citigroup, Barclays, JPMorgan Chase and Royal Bank of Scotland 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.

The Cartel chatroom ran from at least December 2007 until January 2013 and was limited to specific euro/dollar traders. Conversations were said to have taken place just before daily fixes, the brief windows of time when data providers take a snapshot of trading in order to set daily rates.

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