- Chris Ashton wasn't improperly identified in FCA settlements
- Judgment marks first win for FCA on identification issue
Former Barclays Plc currency trader Chris Ashton lost a complaint over whether he had been improperly identified in settlements related to the foreign-exchange scandal, handing the U.K. financial regulator its first win in a series of disputes over the issue.
Ashton claimed media coverage of the "Cartel" chat room, an instant-message group he was involved in, made it easy to work out his name in the Financial Conduct Authority’s settlement documents with Barclays and his former employer UBS Group AG, even though they were anonymized. Both banks paid multi-million pound fines to the FCA for control failures related to their foreign-exchange trading desks.
Judge Timothy Herrington said in a ruling published Tuesday that Ashton had been "unable to satisfy" the court that he was identifiable in the notices. No wording in the settlements would "lead persons acquainted with him professionally, or who operate in his area of the financial services industry," to deduce it was Ashton, Herrington said.
At least nine traders filed lawsuits against the FCA over the last few years complaining the regulator failed to properly make them anonymous in settlement reports with banks. The FCA is obliged to give people the chance to respond to allegations before publication if they’re identifiable. To avoid this, the agency often uses monikers such as "Trader A" to disguise the individuals.
Ashton’s case is the first time a judge has ruled in favor of the regulator on the issue, after the FCA suffered a number of high-profile losses last year. Former Deutsche Bank AG trader Christian Bittar and ex-JPMorgan Chase & Co. executive Achilles Macris had won similar lawsuits in disputes connected to other regulatory settlements.
The Macris case relates to his identifiability in a penalty notice against JPMorgan over the London Whale debacle, when a trader at the bank incurred $6.2 billion in losses. The FCA unsuccessfully appealed the decision last year and is now appealing to the U.K. Supreme Court. A hearing is scheduled in October, according to a Supreme Court spokeswoman.
"We are glad our approach in this case has been upheld," the FCA said in an e-mailed statement. A lawyer for Ashton said she has already filed an appeal of the decision but requested it be heard after the Supreme Court rules on Macris, which will set a precedent for the cases.
At least two other traders have cases outstanding over FCA bank settlements for currency-market manipulation, according to court documents. Richard Usher, JPMorgan’s former chief currency dealer in London, and Rohan Ramchandani, Citigroup Inc.’s former head of G-10 spot currency trading, both filed suits at the end of 2014.
One motivation for traders to challenge the FCA on identification is to obtain documents about the regulator’s case that could help them if they’re also under investigation by other authorities. It is one of the few opportunities traders have to gain an insight into how the regulator came to its conclusions about their behavior.