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Former Forex Trader Accused of Conspiring to Fix Currency Prices

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A former currency trader at a major bank in the United States has been indicted for allegedly conspiring to manipulate prices in the foreign currency exchange (FX) market, the U.S. Department of Justice (DOJ) said in a statement.

Akshay Aiyer has been charged with one count of conspiring to fix prices and rig bids and offers in Central and Eastern European, Middle Eastern, and African (CEEMEA) currencies, which were generally traded against the dollar and the euro.

“Today’s indictment charges the defendant with illegally manipulating the foreign currency exchange market in order to boost earnings, squelch free-market competition, and then cover his tracks,” Federal Deposit Insurance Corporation (FDIC) Inspector General Jay N. Lerner said on May 10.

Aiyer was a former trader at JPMorgan Chase in New York from 2006 until 2015, the Financial Times reported.

According to the charges, from at least as early as October 2010 to July 2013, Aiyer, along with other New York-based CEEMEA traders working for rival banks, participated in a conspiracy that was designed to suppress competition in order to increase each trader’s profits and decrease each trader’s losses.

The indictment follows the guilty pleas made by former CEEMEA traders Jason Katz on Jan. 4, 2017, and Christopher Cummins on Jan. 12, 2017. They were charged in connection with the same conspiracy in which Aiyer is said to have participated.

Katz’s former employer, BNP Paribas USA, Inc., pleaded guilty on Jan. 25, 2018 to violating an act for its participation in a CEEMEA-related conspiracy, and agreed to pay a $90 million fine.

Aiyer and his co-conspirators carried out this agreement by engaging in almost daily conversations through “private electronic chat rooms, telephone calls, and text messages, in which they exchanged trading positions, confidential customer information, planned pricing for customer orders, and other categories of competitively sensitive information,” the indictment stated.

They then used this information to coordinate their live trading in CEEMEA currencies. This included certain traders sometimes refraining from trading against the others. Throughout the conspiracy, Aiyer and his co-conspirators made sure that they concealed their anticompetitive behavior.

The charge carries a maximum penalty of 10 years in prison and a $1 million fine.

“As today’s indictment demonstrates, the Antitrust Division remains committed to holding individuals accountable for anti-competitive conduct that violates the integrity of global financial markets,” Makan Delrahim, assistant attorney-general of the DOJ’s antitrust division, said in a statement.

The indictment comes three years after Citicorp, JPMorgan Chase & Co., Barclays PLC, and The Royal Bank of Scotland PLC pleaded guilty in 2015 and agreed to pay, collectively, more than $2.5 billion in criminal fines for their participation in an antitrust conspiracy to manipulate the price of the euro-U.S. dollar currency pair.