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‘Cartel’ Currency Traders Charged in Market-Rigging Case

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Forex Weekly Outlook November 7-11
  • ‘Cartel’ Currency Traders Charged in Market-Rigging Case

U.S. prosecutors charged three ex-traders at the heart of a criminal investigation that has ensnared the world’s biggest banks over the rigging of currency rates.

Richard Usher, formerly of JPMorgan Chase & Co., Rohan Ramchandani, who used to work for Citigroup Inc., and Chris Ashton, a former Barclays Plc trader, were indicted Tuesday on conspiracy charges in New York. They’re all living in the U.K. and will have to be extradited unless they surrender voluntarily.

The three men used an online chatroom they dubbed “The Cartel” to coordinate trading of U.S. dollars and euros and manipulate prices of the currencies, according to the indictment. They are charged with conspiring to restrain trade from the end of 2007 through the beginning of 2013. The goal of the conspiracy was to suppress and eliminate competition in the trading of the euro and the dollar in the U.S., U.K. and Switzerland, according to the charges.

The case represents the culmination of the government’s promise to prosecute individuals at the center of one of the biggest market-manipulation investigations of the Obama administration. The indictments come after years of criticism against the Justice Department for securing multibillion-dollar corporate penalties without holding individuals to account.

“No one gets a free pass simply because they were working for a corporation,” said Deputy Attorney General Sally Yates, the department’s No. 2 official. “Today’s indictment reiterates our commitment to holding individuals accountable for corporate misconduct.”

Lawyers Fire Back

Lawyers for the traders criticized the U.S. for moving forward with its case after U.K. authorities looked at the same evidence and decided not to bring charges. Stephen Pollard, Ramchandani’s lawyer, said the U.K’s Serious Fraud Office already investigated his client for more than 18 months.

“It is unacceptable for the American DOJ to bypass the SFO decision and seek to prosecute conduct undertaken on British soil by British citizens where the British regulators have confirmed there was no criminal offense,” said Pollard, an attorney with WilmerHale in London.

Usher’s lawyer, Jonathan Pickworth, a partner at White & Case in London, said he was disappointed and that Usher “did nothing wrong.” Ashton’s lawyer Sara George, a partner at Stephenson Harwood LLP, said her client was also cleared by the U.K. authorities and was “never given any legal advice, guidance or instruction by Barclays in relation to U.S. law.”

The charges carry a maximum penalty of 10 years in prison and a $1 million fine, although that figure may be increased depending on the gains from the misconduct.

Usher and Ramchandani were each fined $5 million by the Office of the Comptroller of the Currency, as well, the banking regulator said in a Tuesday statement. The OCC also banned both of them from working in the U.S. banking industry.

Bank Pleas

Citigroup, Barclays, JPMorgan and Royal Bank of Scotland Group Plc pleaded guilty in May 2015 to conspiring to rig currency rates. UBS Group AG received immunity from prosecution, but its conduct in the market breached an earlier agreement over its role in manipulating benchmark interest rates.

“The Cartel” chatroom was limited to specific euro-dollar traders, prosecutors said. Many conversations took place just before daily fixes — the brief windows of time when data providers take a snapshot of trading so they can set daily rates. Usher and Ramchandani started conspiring in December 2007, while Ashton got involved four years later, according to the indictment.

The three former traders participated in telephone calls and electronic messages, including engaging in near-daily conversations in the chat room, which they also referred to as “The Mafia,” where they discussed past, current and future customer orders and trades, prosecutors alleged.

‘The Cartel’

“The Cartel” chat room was started by Usher as early as 2009, according to a person with knowledge of the matter. Usher had risen quickly to the top of his profession. After joining HBOS Plc in 2001, he was hired by RBS in 2003 and a year later collected an industry award on his employer’s behalf. He joined JPMorgan as head of spot foreign exchange in 2010, where he became a member of the now-defunct Bank of England’s Chief Dealers Sub Group, a collection of about a dozen currency traders and central bank officials who met at restaurants and bank offices to discuss industry developments.

The members of the chat room ribbed each other like high-school buddies. Usher was referred to as “Feston” because he resembled an overweight version of British chef Heston Blumenthal, according to people who have seen the chats. Ramchandani, Citigroup’s cricket-loving head of spot trading, was called “Ruggy,” while Ashton, the last one to join, was dubbed “Robocop.”

The U.S. investigation followed a series of articles published by Bloomberg in 2013 exposing how the world’s biggest banks were colluding to rig foreign exchange rates.

The case is U.S. v. Richard Usher, 17-cr-019, U.S. District Court for the Southern District of New York (Manhattan)

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Naira

Naira Falls to N500/US$1 at Black Market on Monday

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Naira - Investors King

Despite efforts by the Central Bank of Nigeria (CBN) to improve dollar liquidity across the foreign exchange segments and prop up Naira value, the Nigerian Naira dipped to N500 against the United States Dollar on Monday at the nation’s black market.

Last week, the CBN announced plans to increase forex allocation to Deposit Money Banks in a bid to ensure Nigerians access forex at a fair rate and not forced to patronise the black market operators with exuberant rates.

The CBN agreed to increase the amount allocated to banks for travellers, Small and Medium Enterprises among others. The banks also agreed to operate something akin to foreign exchange imprest account such that the coffers of banks will be replenished so long as they retire the initial amounts to the satisfaction of the CBN”, stated Mr. Osita Nwanisobi, the Acting Director, Corporate Communications Department at the CBN.

The Naira quickly gained against its global counterparts, improving to N493 against the American Dollar last week before resuming its long-term bearish trend to N500/US$1 at the black market on Monday 21, June 2021.

The embattled currency depreciated in value against both the Euro and British Pound, exchanged at N590 and N710, respectively.

At the NAFEX window, the CBN new adopted official rate, the Naira traded at N411.67 to a United States Dollar on Monday while investors transacted $94.17 million during the trading hours of Monday.

At the Bureau De Exchange section of forex, Naira sold for N495 per US Dollar, N715 to a British Pound and N603 to a Euro.

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Naira

Nigerian Naira Exchange Rates; Tuesday, June 22, 2021

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Naira - Investors King

 The Nigerian Naira lost N2 against the United States Dollar on Monday to N500 despite efforts by the Central Bank of Nigeria to prop the local currency value.

The embattled currency remained pressured at N710 to a British Pound and N590 to a single Euro.  Naira opened at N500 to a United States Dollar on Tuesday.

Naira Black Market Exchange Rates

Morning * Midday** Evening *** Final Rates

Date USD GBP EURO YUAN Canadian Australian
NGN BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL
22/06/2021 495/500* 703/710* 585/590* 62/69 400/410 300/322
21/06/2021 495/500 703/710 585/592 62/69 400/410 300/325
18/06/2021 492/498 700/710 585/595 62/69 400/410 300/325
17/06/2021 483/493 700/710 590/600 62/69 400/410 300/322
16/06/2021 497/502 707/713 600/606 62/69 400/410 300/322

Bureau De Change Naira Rates

Date USD GBP EURO
NGN BUY/SELL BUY/SELL BUY/SELL
22/06/2021 485/495 700/715 580/603
21/06/2021 480/490 680/710 550/603
19/06/2021 475/490 680/715 580/603
18/06/2021 475/485 680/715 580/603
17/06/2021 478/490 690/710 590/603
16/06/2021 495/500 707/718 600/609
15/06/2021 495/500 707/718 600/609
14/06/2021 490/498 705/718 600/608

Central Bank of Nigeria’s Official Naira Rates

Date Currency Buying(NGN) Central(NGN) Selling(NGN)
6/21/2021 US DOLLAR 409.2 409.7 410.2
6/21/2021 POUNDS STERLING 567.6422 568.3358 569.0294
6/21/2021 EURO 486.5797 487.1743 487.7688
6/21/2021 SWISS FRANC 444.0586 444.6012 445.1438
6/21/2021 YEN 3.7166 3.7212 3.7257
6/21/2021 CFA 0.7231 0.7331 0.7431
6/21/2021 WAUA 583.9237 584.6372 585.3507
6/21/2021 YUAN/RENMINBI 63.2634 63.3412 63.4189
6/21/2021 RIYAL 109.1113 109.2446 109.3779
6/21/2021 SOUTH AFRICAN RAND 28.7174 28.7525 28.7876

 

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Naira

Naira Exchange Rates; Monday, June 21, 2021

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Naira Dollar Exchange Rate - Investors King

The Nigerian Naira continues its decline against global counterparts after gaining on the back of the Central Bank of Nigeria’s proposed increase in foreign exchange supply to all forex operators across the country.

Naira gained on the parallel market to exchange at N493 against the United States Dollar on Tuesday 15, June 2021 before dropping to N497 on Wednesday 16, June 2021.

The local currency plunged as low as N502 to a United States Dollar on the parallel market before the CBN announced its plans to up liquidity in an effort to ease scarcity and speed up business activities in the largely import-dependent economy. See the Naira exchange rates across various sections of foreign exchange markets.

Naira Black Market Exchange Rates

Morning * Midday** Evening *** Final Rates

Date USD GBP EURO YUAN Canadian Australian
NGN BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL
21/06/2021 495/500 703/710 585/592 62/69 400/410 300/325
18/06/2021 492/498 700/710 585/595 62/69 400/410 300/325
17/06/2021 483/493 700/710 590/600 62/69 400/410 300/322
16/06/2021 497/502 707/713 600/606 62/69 400/410 300/322

Bureau De Change Naira Rates

Date USD GBP EURO
NGN BUY/SELL BUY/SELL BUY/SELL
21/06/2021 480/90 680/710 550/603
19/06/2021 475/490 680/715 580/603
18/06/2021 475/485 680/715 580/603
17/06/2021 478/490 690/710 590/603
16/06/2021 495/500 707/718 600/609
15/06/2021 495/500 707/718 600/609
14/06/2021 490/498 705/718 600/608

Central Bank of Nigeria’s Official Naira Rates

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