FX ‘Cartel’ Traders Face Tough Fight on U.S. Extraditionby , , and
Three men charged in U.S. with rigging foreign-exchange rates
U.S. has had a lot of success extraditing targets from U.K.
Three British traders charged in New York with rigging foreign-exchange rates may struggle to avoid being sent to the U.S., as America’s appetite for extraditing U.K. targets shows no sign of waning, according to lawyers.
Richard Usher, formerly of JPMorgan Chase & Co., Rohan Ramchandani, who used to work for Citigroup Inc., and ex-Barclays Plc trader Chris Ashton were indicted Tuesday, accused of conspiring to manipulate the foreign-exchange market. They are likely to be extradited unless they surrender voluntarily, a stark contrast to other European nations, including Germany.
The men haven’t received a formal extradition request but should be certain that one is on its way, according to Roger Burlingame, a former white-collar department head at the U.S. prosecutor. The possibility of a protracted extradition fight won’t deter the Department of Justice, he said.
"The hope that the DOJ would give up on the case ended with the indictment," said Burlingame, a London-based lawyer who advised Navinder Sarao, a British trader extradited to the U.S. last year. The "DOJ is well aware of the time lag involved in extraditing defendants from the U.K. Their appetite to pursue these cases shows that they are in no way dissuaded by it."
The U.K. is more willing to extradite citizens than other European countries. Several Volkswagen AG executives may avoid charges in the U.S. over their role in the diesel emissions scandal by staying in Germany, which doesn’t hand citizens over to foreign courts.
Herve Falciani, a Frenchman who took client data while working at HSBC’s Geneva unit, remains free despite being found guilty of corporate espionage in absentia and given a five-year prison sentence by a Swiss court in late 2015. France doesn’t normally extradite its own citizens.
“England is one of the worst places you can be if America requests extradition because it’s so difficult to defend," said Karen Todner, a London extradition lawyer for Lauri Love, a U.K. computer activist accused of hacking into U.S. government computers and stealing data.
Sarao, who became known as the flash-crash trader because of an alleged link to the 2010 market event, was extradited in November to face charges of spoofing and wire fraud following an 18-month battle in the English courts. Two months earlier, Love lost his bid to avoid extradition.
Lawyers for Usher, Ramchandani and Ashton declined to comment beyond statements released Tuesday expressing their disappointment that the U.S. decided to pursue the case when the U.K. Serious Fraud Office dropped its own probe last year. Sara George, Ashton’s lawyer, said Wednesday that Barclays won’t fund any extradition proceedings. The bank declined to comment.
The departure of President Barack Obama probably doesn’t make a difference to the prosecution of the traders, attorneys said. The cases have been built over a number of years and must be based on evidence the agency believes is sufficient to file the indictments.
"A prosecution like this involves a large number of people and cooperation among a number of agencies working over a long period of time,” Burlingame said. “Cases are built from the ground up. Senior DOJ officials can weigh in to stop a prosecution, but they cannot wave a wand and create a case.”
The statements by the traders’ attorneys suggest that the trio may rely on arguments of “dual criminality” and the ‘‘forum bar” in the event of an extradition fight. Under a “dual criminality’’ defense, a person can’t be extradited to the U.S. unless the conduct is also an offense in the U.K. The “forum bar” raises the question of whether it would be more appropriate for the requested person to be prosecuted in the U.K.
But these arguments will be contingent on the details of the U.S. probe, according to Thomas Garner, a London extradition lawyer at Gherson.
"The SFO decision not to prosecute the men is likely to be of considerable interest," Gherson said. "But before knowing its significance you would have to see the precise allegations in the U.S. and how they are presented in the extradition request -- they may not be the same as that investigated by the SFO."
The traders were charged following a more than three-year investigation into manipulation of key foreign-exchange benchmark rates that has seen banks globally fined about $10 billion. Jason Katz, a former Barclays currency trader, became the first to plead guilty in relation to the allegations in a U.S. court last week.
Two British HSBC Holdings Plc currency traders, Mark Johnson and Stuart Scott, were also charged by the Justice Department last year. Prosecutors said in October they were seeking Scott’s extradition.