The Office of the Comptroller of the Currency (OCC) has issued notices of $5 million fines against former foreign exchange traders Richard Usher, ex-head of G10 spot trading at JP Morgan, and Rohan Ramchandani, ex-head of European spot trading at Citibank, for violating the Sherman Antitrust Act and engaging in unsound practices.
The OCC's notice was issued the day after both men were formally indicted by the Department of Justice (DoJ) for conspiracy to manipulate EUR/USD and eliminate competition.
The OCC notices cover offences perpetrated between December 2007 and January 2013, when Usher and Ramchandani used an online chatroom dubbed 'the Cartel' to co-ordinate their trading activities for the WM/Reuters and European Central Bank euro fixes.
In the chatroom, one trader would agree to withhold trades in the currency pairs the other was trading, so as to not adversely affect the other's positions. They also synchronised spreads to be quoted to clients, as well as revealing customer orders.
The OCC fines and DoJ indictment relate in part to violations of the Sherman Antitrust Act, which dates from 1890, and was the first US legislation passed to outlaw monopolistic business practices.
The Federal Reserve has announced it will issue an enforcement action against another trader who took part in the 'Cartel' chatroom.
JP Morgan has paid out $2 billion and Citi $2.7 billion in criminal and civil penalties to regulators in the UK and US, regarding the manipulation of forex benchmarks and undermining competition in markets.
The notices issuing the $5 million fines, and prohibiting Usher and Ramchandani from occupying functions in a federally insured depository institution, will be heard in the federal district courts of the Southern District of Ohio and South Dakota.
"Through their participation in the Cartel chatroom, Messrs Usher and Ramchandani engaged in unsafe or unsound practices, breached their fiduciary duties, and entered into and engaged in a conspiracy with other euro traders in the chatroom to suppress or eliminate competition and increase, decrease, fix, maintain or stabilise prices in the forex spot market," the OCC said in its statement.
This article originally appeared on Risk.net's sister website FXWeek.com.
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