Forex Expert Gives Evidence in “Cartel” Trial

Chris Lee
Judge gavel

A finance expert in the US has given evidence as the defence side of the forex “Cartel” trial brings together its case.

Professor Michael Melvin, who is on the staff at the Rady School of Management at the University of California, San Diego, and is also a former managing director of the firm BlackRock, spoke for the whole day at the trial in New York City.

Three men – Richard Usher, Christopher Ashton and Rohan Ramchandani – are accused of using an online chat service to fix foreign exchange prices and secure higher profits.

However, Professor Melvin emphasised the role of the foreign exchange market’s large, globalised nature.

“FX is the biggest market in the world in terms of trading volume”, he said. “The prices are pretty much the same, globally.”

“I think they’re always sharing market colour with one another. People share information all day long. That’s really a part of their business.”

In addition to his expert testimony, Melvin has also worked on the swathes of data that the alleged cartel shared with each other.

He has, for example, gone through the records of conversations between the trio and attempted to cross-reference them with the trades they actually placed – and found that in some cases they did not match up.

In fact, there are even suggestions that the defendants may have ensured that on purpose as a tactic to undermine one another.

This practice was described by a defence lawyer in the trial recently as “fix poker”.

Melvin is working with the defendants for a fee of $120,000 US dollars, or just over £92,000 British pounds.

The trial represents a long-running saga both in the foreign exchange fraud world and in the wider financial services industry.

The three defendants have all been associated with major financial institutions in the past – giving the trial a high profile edge. All three are British.

Rohan Ramchandani was associated with Citigroup at the time of his alleged crimes, for example, while Richard Usher worked at JPMorgan Chase & Co. Christopher Ashton, meanwhile, was in charge of spot FX trading at Barclays.

Each one could be sentenced to a decade in prison if they are found guilty. It is understood that the case will be referred to the trial’s jury later this week.

Last week, a witness on behalf of the government named Matt Gardiner was quizzed in the courtroom.

He is a former trader with UBS and Barclays, and he is believed to have helped bring the group together. He is working with the prosecution on the basis that no charges will be brought against him if he does so.

Last month, two of the three defendants said that they would no longer be seeking to subpoena the makers of an electronic trading platform which they claim they needed access to in order to gather evidence.

The defendants told the court that they had been able to access the information without needing to subpoena the owners of EBS Market, which used to be known as Electronic Broking Services.


Chris Lee

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