The Road to Acquittal: Takeaways from U.s. v. Usher, Et Al.
| Publication year | 2020 |
| Author | By Niall E. Lynch |
By Niall E. Lynch1
By the time the U.S. Department of Justice took three former London-based foreign currency exchange traders to trial for felony violation of the Sherman Act, the agency had already gathered billions of dollars in fines from banks for the manipulation of foreign currency exchange rates. The case against the three traders is US v. Usher, et al., Crim. No.1:17-cr-00019.
Under the Indictment, from at least as early as December 2007 and continuing at least through January 2013, the defendants and their co-conspirators participated in a combination and conspiracy to suppress and eliminate competition for the purchase and sale of EUR/USD in the United States and elsewhere by fixing the price of, and rigging bids and offers for, EUR/USD in the FX spot market.
Richard Usher, former Head of G11 FX Trading-UK at an affiliate of Royal Bank of Scotland plc, as well as former Managing Director at an affiliate of JPMorgan Chase & Co., Rohan Ramchandani, former Managing Director and head of G10 FX spot trading at an affiliate of Citicorp, and Christopher Ashton, former Head of Spot FX at an affiliate of Barclays PLC, were alleged to have conspired to manipulate the FX market by "coordinating their bidding, offering, and trading" at "certain times."2
However, a federal jury in New York rejected the government's claim and acquitted all three of the individuals. The panel discussed this significant criminal antitrust trial, each side's case-in-chief, key issues of the trial, and takeaways.
- Andre Geverola is the Director of Criminal Litigation for the Antitrust Division of the U.S. Department of Justice. As Director of Criminal Litigation, Mr. Geverola supervises all criminal litigation and trial matters across the Antitrust Division's five criminal sections. Mr. Geverola has worked at the Antitrust Division since 2007, where he worked as a trial attorney and as Assistant Chief in the Chicago office. In these roles, Mr. Geverola led numerous investigations and prosecutions of companies and individuals in a variety of industries. Before joining the Antitrust Division, Mr. Geverola worked in private practice at an international law firm where he represented companies and individuals in government investigations and litigation.
- Heather S. Nyong'o was trial counsel for defendant Rohan Ramchandani. Ms. Nyong'o leads WilmerHale's California Cartel Enforcement Practice. She is an experienced litigator and first chair trial lawyer. Her more than 17 years in the white collar and antitrust space includes a tenure in the Antitrust Division of the U.S. Department of Justice. She has led noted complex cases and also represents individuals and corporations in non-public grand jury investigations. Ms. Nyong'o brings her experience and insight to government investigations including those that result in criminal or civil litigation. She fully serves her clients across every phase of an investigation and litigation, including through trial.
- David Schertler was trial counsel for defendant Christopher Ashton. Mr. Schertler is widely recognized as one of the top white-collar defense attorneys in the Washington, D.C. area and nationwide. He founded Schertler & Onorato in 1996 and has built the firm's reputation as a premiere litigation boutique through his broad experience with criminal and civil investigations in trial matters. Mr. Schertler began his legal career as a trial attorney in the Antitrust Division of the U.S. Department of Justice. He became an Assistant U.S. Attorney for the District of Columbia in 1984 and also served as Chief of the Homicide Section of the U.S. Attorney's Office from 1992 to 1996.
[Page 55]
MR. LYNCH: This was a criminal trial. It had to do with whether or not three executives from traders of foreign currency from London were going to actually spend time in jail in the United States. So the stakes were really quite high, and the case was fascinating.
Let me first talk to you a little bit about what we'll cover today. I'll do a quick overview of the case, give a little bit of background. Then I'm going to turn it over to Andre to give the government's theory of the case and how they presented it, the evidence they presented, and issues at hand. And then I will have Heather and Dave talk about the defense case, because the defense case was quite interesting, had a lot of different issues that I think are pretty noteworthy. And then we'll talk more broadly about key issues of the trial. And finally, what worked, what didn't work, why the result was the way it was, and was there surprises or lessons learned. And if we have time, we can even open it up to questions.
Let's start with a quick overview. The three individual defendants were all former foreign exchange traders, and for those of you who don't know this market, foreign currency trading is the trading of paired currencies. They were involved in the euro-dollar trade, so they would buy and sell euros and dollars. This was an incredibly large market. Some were upwards of $4 trillion of commerce a day. I think by some measure this was the largest criminal cartel case ever investigated and prosecuted.
The first defendant was Christopher Ashton. The next was Rohan Ramchandani, and then the third was Richard Usher. They had little nicknames, and as you'll hear, a lot of the evidence in the case was based on what were called "chat rooms." These were text messages that went back and forth every day for years between every trader and other traders in the market. And as you'll see, there was very colorful chats and lots of body language and nicknames. And I'm going to let Heather and Dave explain those. The three defendants were all British citizens living in the UK. They voluntarily came to the United States to face charges. They could have stayed in the UK. They could have fought extradition and probably successfully, because the UK authorities had investigated this very same conduct and chose not to prosecute. So they willingly came to the United States to face these charges, even though they faced the threat that they could spend many years in jail.
[Page 56]
Who tried the case? The prosecution team was all staffed out of New York field office of the U.S. Department of Justice, JeffMartino, Carrie Syme, Bryan Bughman, and David Chu. We hoped to have David here today, but he's actually in trial on the second FX trial that's currently going on in New York. And that trial was delayed a little bit, so he couldn't make it today. Andre has agreed to cover for both of them. We thank Andre for doing that. On the defense side, Usher was represented by Michael Kendall and Mark Gidley of White & Case. Ramchandani was represented by Heather and Anjan Sahni. We have other members of the trial team here today as well from WilmerHale: Thomas Mueller, Chris Johnstone, and Dan Crump. We're thrilled to have them. Finally, Ashton was represented by David Schertler and his associate Lisa Manning.
What was the charge? This was a one count indictment. It was filed in January 2017 in literally the last days of the Obama administration. It alleged a per se violation of the Sherman Act, and the allegation was that between the period of 2007 through 2013, the defendants worked as currency traders for separate banking companies in London and participated in a conspiracy to suppress and eliminate competition for the purpose and sale of euros and dollars in the United States and elsewhere. There were three defendants and one cooperator in the interbank chat room, sometimes referred to as, quote/unquote, the cartel, which was obviously helpful to the government and widely cited. But there is a back story to that, which Heather and Dave will explain. Each was the desk head of a euro-dollar FX trading at a major international bank. Rohan was at Citibank; Usher at JP Morgan and Ashton at Barclays. One other member of this cartel chat room was Matthew Gardiner of UBS, based in Zurich. UBS was amnesty applicant. Gardiner cooperated with the government, and he was fully immunized. He played a very central and significant role in the case, and Andre will discuss that. And these were some of the major banks in the euro-dollar trading market.
Before the trial, all the banks plead out and paid $14 billion in fines and civil damages to the U.S. DOJ, the CFTC, and other regulatory agencies. The trial was a three-week jury trial in the Southern District of New York before Judge Richard M. Berman. The government called nine witnesses, including two experts. The defense called two witnesses, including one expert. And the jury deliberated three hours before reaching not guilty verdicts.
It was the first case that actually went to trial. None of the banks chose to fight this case in court. And as I said before, there's a second FX trial against I think one individual maybe more, going on right now in the Southern District, but not in front of Judge Berman. It's in front of another judge. With that as background, I will hand it over to Andre to describe the government's theory of the case, how they tried to prove their case, and what evidence they used.
[Page 57]
MR. GEVEROLA: Thanks, Niall. As Niall explained, this case arose from our fairly extensive investigation into foreign exchange trading, and it resulted not just in this trial, we have one going on now in New York on different currency pairs. It was actually also related, but a separate trial involving front running that was handled by the fraud section. So this was a large investigation involving many, many parties.
For this particular case, the theory was that when traders agree on their trading strategies and their trading execution, that is a violation of the Sherman Act. What does that mean? Let me give you a couple of examples. One, if a trader agrees to withhold bids from the market for a period of time so as not to bid price up or down...
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