Ex-Barclays Forex Trader Faces Action for Price Fixing
Christopher Ashton, the disgraced former forex trader at Barclays PLC, is likely to face a fine of $1.2 million in addition to a ban from working in the banking industry on account of his actions including the manipulation of forex pricing. The Federal Reserve Board had released a statement to this effect in an enforcement notice that detailed the extent of Mr. Ashton’s actions.
Chat Rooms Used for Price Fixing
According to the Federal Reserve Board, Ashton is believed to have made use of chat rooms to conduct his illegal activities. Formerly the global head of Barclay’s forex spot business and based out of London, Ashton allegedly disclosed confidential data about his customers to other traders while also working with them to fix forex pricing benchmarks. The online chat room used by him was known in the industry as The Cartel and many more senior traders from UBS, JPMorgan, and Barclays are believed to have been a part of it.
Ashton is accused of using The Cartel chat room almost every day as part of his efforts to manipulate currency benchmarks. The members of the group are understood to have obtained advantages over other traders thanks to their illegal sharing of confidential information.
Ashton also started another chat room focused on the Pound Sterling. Known as the ‘Sterling Lads’, this chat room was used to manipulate the exchange rate of the British currency. Ashton’s activities first drew the attention of authorities when his performance zoomed upwards for no specific reason. Investigations revealed that his bonus, which was $498,000 before he joined the chat group, soared to $948,300. He has had a very long tenure as a senior Barclays executive, from September 2006 to November 2013 when he was suspended. He was finally fired in May 2015.
The disgraced trader has taken the battle to his former employer by suing Barclays PLC for firing him without cause. Ashton insists that he has been penalized for being a whistleblower on the activities of the chat rooms. In fact, he maintains that he tried to expose the scam in 2012, at least a year before the information became public knowledge.
US Federal Reserve Targeting Wrongdoers
The Federal Reserve’s action against Ashton comes on the heels of another scandal surrounding Matthew Gardiner, formerly a trader with UBS. He was also associated with The Cartel and was eventually banned for life from the banking industry on account of his illegal activities. The Board went after Ashton since he had acted in collusion with American traders and also because Barclays operates in the US. It is clear from its actions that the Board will be taking an aggressive stance against financial wrongdoing.
Barclays to Also Face Penalties
Ashton’s former employers will not be able to escape the fallout from the scandal. The Federal Reserve Board has held the company accountable for permitting unsafe business practices and failing to control illegal activities. The company will have to part with $342 million in fines for not managing its forex business better.
About Barclays PLC
Founded on 17 November 1690, Barclays PLC is a British multinational banking and financial services company. Headquartered in London, it is a universal bank with operations in investment, wholesale and retail banking as well as credit cards, mortgage lending and wealth management. Globally, it has operations in more than 50 countries and territories and has approximately 48 million customers.
Barclays is not new to controversies. In the 1980s, it was involved in the apartheid regime in South Africa and the legal proceedings are still being heard at the Second Circuit Court of Appeals in New York. The Ministry of Justice, South Africa is trying to seek dismissal of the case.