Accused "FX Cartel" Members Joined Forces After Trying To "End" Each Other

As federal prosecutors in Manhattan press ahead with the trial of three London-based currency traders - members of the infamous "FX Cartel" who allegedly colluded to move exchange rates in their favor during the brief moments before the daily fix - more amusing details from the cartel's group chat where most of the alleged collusion took place have started to emerge.

In one anecdote that helps explain the genesis of the cartel conspiracy, two of the three traders, former JPMorgan Chase & Co. trader Richard Usher and ex-Citigroup Inc. trader Rohan Ramchandani, share how they used to "end" each other on opposing trades before they finally "got together."

As he has done for the duration of the trial, government star witness Matt Gardiner, a former colleague who agreed to plead guilty to avoid prosecution, explained the text messages to the jury.


Here's Bloomberg:

Prosecutors presented the transcripts as evidence of the cooperation. In the following excerpt, Usher wrote to a colleague about Ramchandani:

he used to kill me at ecb fix, that’s why I called him up and said let’s get together cos i rather have u onside

Ramchandani also wrote to an ex-colleague:

u know how rich and me started talking

we used to end each other on fixes

eventually we met

chat now

and never are on the other side!


Gardiner, a former currency trader at Barclays and UBS Group AG, was asked by a defense lawyer whether the widespread market practice of seeking and sharing information could be considered coordination. Michael Kendall, a lawyer for Usher, suggested in cross-examination that all the traders acted independently to maximize profits for their banks.

In a prime example of the "market color" that the traders' lawyers said they would swap in the chat group, the conspirators would often swap congratulations when one of their trades was paying off while "discussing" situations where they were on opposing sides in "sometimes angry exchanges." The government has called a handful of other witnesses, including Jeremy Tilsner, a senior director at consultant Alvarez & Marsal, to testify about his analysis of the traders' transactions, while prosecutors also called witnesses from CLS Group Holdings AG, Barclays, JPMorgan and Citigroup to discuss the currency-settlement processes.

All told, global banks have paid a combined $14 billion in fines related to charges of currency rigging.


If the men are convicted, they could face up to 10 years in prison. And after a jury earlier this week handed down convictions for two Deutsche Bank traders for rigging Libor, despite what appeared to be a fumbling performance by the prosecution, we imagine the former "Cartel" members are starting to feel anxious.