The U.S. Federal Reserve has fined and banned for life the former Barclays FX trader Christopher Ashton, a member of a chatroom that called itself ‘The Cartel’ where bank traders allegedly manipulated foreign-exchange rates.
The Fed imposed a $1.2 million fine on the former trader and said that it prohibits the organizations from re-employing or otherwise engaging individuals who were involved in unsafe and unsound conduct.
Before joining The Cartel, Mr. Ashton served as global head of the FX spot-trading business at Barclays in London where he allegedly used chatrooms to manipulate currency pricing benchmarks and to share confidential information about clients’ trades with traders at other banks. The Fed has fined six banks in the last two years for similar offences and said that the lenders had to cooperate in the investigation against their traders.
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The Federal Reserve accused Christopher of creating electronic chat rooms known as ‘Essex Express’ to focus on the Japanese yen, and another room known as ‘Sterling Lads’ to focus on the British pound.
The U.S. central bank found that members, using different names to disguise client requests for quotes and trading activity, shared information and conspired to move currency benchmarks including the so-called 4 p.m. fix in London.
The enforcement action came after the Fed’s board fined Barclays a total of $342 million earlier in May 2015. The UK lender has paid a total of $2.4 billion in criminal and civil fines over allegations of manipulating foreign-exchange rates.
“Ashton’s conduct showed a willful and continuing disregard for the safety and soundness of Barclays in that he engaged in a sustained pattern of misconduct over the course of years, which subjected the firm to financial loss and legal and reputational risk,” the Fed said.
The investigation revealed that Ashton’s bonus jumped to £725,000 ($948,300) in 2011, up from £380,000 in the year prior, after he generated exceptional trading profits following his engagement with the Cartel’s instant-messaging groups.