US government asks for extra evidence time in alleged forex fraud cases

Chris Lee

The US government has requested another “discovery stay” on evidence in the ongoing foreign exchange benchmark rate fixing saga.

A discovery stay means that the Department of Justice (DoJ) would be permitted to not disclose documents and other forms of evidence, like depositions, to other parties just yet.

Documents outlining the proposal for a discovery stay were submitted on 17th September with the Southern District Court of New York.

 

If granted, it would affect a variety of ongoing cases brought together under the forex fixing umbrella.

The cases, which are being spearheaded by the Antitrust Division and the Fraud Section of the Criminal Division of the DoJ, include United States v. Usher, et al., 17-cr-19.

That case is due to begin on October 9th of this year. “Usher et al” refers to Richard Usher, Christopher Ashton and Rohan Ramchandani.

Usher was Head of G11 FX Trading at a bank linked to Royal Bank of Scotland (RBS), while Ashton was Head of Spot FX at a Barclays-linked bank. Ramchandani worked with an organisation linked to Citicorp.

Together, the trio – each member of which denies the allegation – has been nicknamed the FX Mafia for their alleged role in a plot to make it harder for other potential buyers to enter the forex market in a way that contravened the Sherman Act, which regulates competition.

Other cases which could be affected by the developments include United States v. Bogucki, 18-cr-21.

This case, against former Barclays forex trader Robert Bogucki, alleges that he committed fraud while working on behalf of Barclays client Hewlett-Packard Co.

Bogucki has accused of wire fraud as well as suggestions that he managed the market in an illegal manner. Bogucki’s lawyers claim that the case against him rests on the idea of him having a “fiduciary duty” to his client, which they say he did not.

This trial is scheduled to begin next year on February 4th in the Northern District of California.

This is not the first time the Department has asked for a stay in this case. Back in June, it requested – and was granted – an additional five months to keep hold of evidence.

As a result of that stay, evidence from a range of banks with employees allegedly involved in forex fraud, including RBS, BNP Paribas, JPMorgan Chase, Barclays, Citibank and more, was held back.

The evidence held back at that time included interviews conducted with employees as well as depositions submitted by them.

At that time, some of the other participants in the cases objected, but the stay was granted anyway. At least one of those affected by the most recent discovery stay extension request is also believed to be planning to object to the plans.

Prior to the last discovery stay, the DoJ received a three-month extension in March.

According to industry press, opponents at that time argued that the stay could lead to witnesses altering their perspectives or statements.

However, the same judge who granted the most recent stay, Lorna G. Schofield, also agreed to grant that one.


Chris Lee

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