More than a year after three London-based FX traders were extradited to the US to stand trial in a New York courtroom as part of the infamous “cartel” case – wherein traders from some of the world’s largest currency dealers allegedly conspired to rig benchmark exchange rates – proceedings have finally begun. The federal trial is expected to take two weeks, but as the prosecution began laying out its case, which reportedly relies on testimony from Matthew Gardiner – a former UBS and Barclays trader and cartel member who cut a deal to avoid jail time in exchange for his testimony – transcripts from the infamous cartel chat, where most of the alleged wrong doing took place have shed light on the brazenness of these traders, who used “coded” language to try and mask their attempts to influence the euro-dollar exchange rate to the benefit of their trading books.


The former employers of all three accused traders have already agreed to massive fines to resolve criminal and civil charges stemming from the scandal, meaning that these criminal trials are essentially the last loose string in the US government’s push to ensure that FX markets remain manipulation-free. According to Bloomberg, the chat records shared with the jury indicated that the cartel traders continued with their allegedly illegal behavior even after they started to suspect that regulators had caught on.

Back in 2012, former JPMorgan Chase & Co. trader Richard Usher mocked regulators in a chat with Gardiner, former Citigroup trader Rohan Ramchandani and Christopher Ashton, previously head of spot FX trading at Barclays.

“For compliance purpose no collusion going on here hahahaha…”

Gardiner spent most of Monday’s session parsing on behalf of the jury the day-long chats and telephone call transcripts that were littered with Cockney rhyming slang and obscure references to “Star Wars” and BBC kids’ shows. Most of the illicit activity was intended to manipulate exchange rates ahead of the daily currency fix – the window when data providers take a snapshot of exchange rates to serve as a daily benchmark. There are several different “fix” time, the 4 pm London Time fix is the most widely used. Gardiner had previously said that the cartel had a “gentlemen’s agreement” not to trade in a way that would hurt other members’ positions.

Explaining one chat, Gardiner told jurors that one of the other traders had an open position totaling 625 million euros ($724 million), or, in their lingo, a monkey (500 million euros) and half a chimp (125 million euros).

Defense lawyers, who questioned the ex-trader’s credibility during opening arguments, will get their chance to cross-examine Gardiner Tuesday.

The traders discussed their interests and open positions in the online chats before key price benchmarks were set in London, Gardiner said. In some cases, they would tag-team trades in an effort to move prices in the same direction, or hold off if their bets might trigger a loss for others.

On occasion, the stars would align and all the traders would have customer orders pointing in the same direction – a rare occurrence that was frequently celebrated.

Ramchandani in 2008 chat message:

“It’s awesome I think we’re both helping each other out” Usher: “Best day for as long as I can remember” “And I owe it all to you” Ramchandani: “I’m having best week ever too.”

When Ashton was told by Barclays’ compliance team that he couldn’t participate in the multibank chats anymore, he left the chatroom in August 2012, eliciting humorous commentary from his colleagues.

Usher noted the occasion, saying:

“wow man down”

Defense attorneys will seek to paint Gardiner as a “flawed” witness who essentially bought his freedom by selling out his one-time compadres. Meanwhile, in the same courtroom, a criminal trial related to Libor rate-rigging is winding down, more than half-a-decade after news of that scandal initially broke.

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