City traders charged with forex rigging

American justice officials have charged three London-based City traders with conspiring to rig foreign exchange markets.

Christopher Ashton, former head of spot foreign exchange trading at Barclays, Rohan Ramchandani, a former trader at Citigroup, and Richard Usher, JP Morgan’s former chief London-based currency trader, were charged last night by the US Department of Justice.

The department said that the traders had fixed benchmark rates for US dollars and euros by sharing information on future business in an electronic chatroom, in which they described themselves as “the cartel” and “the mafia”.

None of the men are resident in the United States and therefore would have to be extradited first, potentially setting up a lengthy legal fight.

Bill Baer, principal deputy associate attorney-general, said: “The charged conspiracy involved competitors manipulating the exchange rate for the hundreds of billions of dollars traded on foreign exchange markets for their benefit and to the detriment of their customers. We previously secured criminal convictions of the financial institutions involved in the misconduct. Today we seek to hold accountable the individuals who conspired on their behalf.”

The men were charged with one count of conspiring to fix prices and rig bids for US dollars and euros in the foreign exchange spot market. The charge carries a maximum penalty of ten years imprisonment and a $1 million fine, which can be increased depending on the proceeds derived from the alleged crime and the loss suffered by victims.

Jason Katz, a former Barclays currency trader, became the first person to plead guilty to criminal charges over foreign exchange manipulation. At a hearing in New York last week he admitted taking part in a price-fixing conspiracy to rig the Russian rouble, South African rand and other emerging markets currencies.

Mr Ashton has been banned for life by the Federal Reserve from working in the US banking industry. He lost a claim for unfair dismissal from Barclays last year.

The charges double the number of individuals alleged by the US government to have taken part in the conspiracy, in which banks have paid out about $10 billion in fines, more than the total penalties for Libor-rigging.

A fourth trader, Matt Gardiner, formerly of UBS and Standard Chartered, was said to be co-operating with the inquiry, according to Bloomberg.

The prosecutions in America are in contrast to the approach taken in Britain. The Serious Fraud Office said last year that it would not bring any criminal charges after it found insufficient evidence.