It is now up to a Manhattan federal jury to determine the fate of three former foreign exchange (forex) traders based in London who have been accused of rigging forex rates. On Thursday, the jury heard closing arguments, wrapping up a two-week trial presided over by US District Judge Richard Berman, where the lawyers of the defendants urged the jurors to clear their client’s names and reject the information presented by prosecutors.
The lawyers for Chris Ashton, Rohan Ramchandani and Richard Usher, who worked at Barclays Plc, Citigroup Inc and JPMorgan Chase & Co, respectively, asked the jury to disregard the testimony of the prosecutor’s star witness, a former UBS AG trader Matt Gardiner – stating their clients did nothing wrong by sharing market information.
The three men have all been charged with violating US antitrust law. During the trial, the jury was presented records of computer chats, dubbed as “the cartel.” Gardiner testified that himself and the three defendants used “the cartel” to collude and influence the daily euro-dollar benchmark exchange rates. This was done to benefit their own positions, he said.
In fact, the outcome is very likely to be determined based on Gardiner’s credibility, who took a deal to avoid prosecution by testifying. In addition to this, the jury also heard about strategies like double-teaming and “bulleting” — or buying aggressively — to rig the euro-dollar exchange rate.
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Could Four Men Have a Major Impact on Forex Rates?
However, the defense argued that there was no way a small group of forex traders could make any real impact – particularly when considering there are hundreds of competitors battling to get the best price on trades.
Instead, the defense said that the chat was just an everyday tool that traders used to swap market color so they can do their job. In addition, the traders were also open about their participation in the chat and were never asked by management or regulators to stop.
David Schertler, a lawyer for Ashton, argued that Gardiner did not point out that there was any specific agreement between the four men to rig forex rates. He said: “There is really no evidence of any agreement, other than Mr Gardiner saying, I thought it was understood.”
The case against the three men follows on from a worldwide investigation into the rigging of rates. This resulted in about $10 billion worth of fines from several large banks, with Barclays, Citigroup, JPMorgan, BNP Paribas SA, Royal Bank of Scotland Group Plc, and UBS Group AG all entering into related guilty pleas. Collectively, they were fined more than $2.8 billion.