Antitrust and Unfair Competition Law

Competition: Spring 2020, Vol 30, No. 1


By Niall E. Lynch1

By the time the U.S. Department of Justice took three former London-based foreign currency exchange traders to trial for felony violation of the Sherman Act, the agency had already gathered billions of dollars in fines from banks for the manipulation of foreign currency exchange rates. The case against the three traders is US v. Usher, et al., Crim. No.1:17-cr-00019.

Under the Indictment, from at least as early as December 2007 and continuing at least through January 2013, the defendants and their co-conspirators participated in a combination and conspiracy to suppress and eliminate competition for the purchase and sale of EUR/USD in the United States and elsewhere by fixing the price of, and rigging bids and offers for, EUR/USD in the FX spot market.

Richard Usher, former Head of G11 FX Trading-UK at an affiliate of Royal Bank of Scotland plc, as well as former Managing Director at an affiliate of JPMorgan Chase & Co., Rohan Ramchandani, former Managing Director and head of G10 FX spot trading at an affiliate of Citicorp, and Christopher Ashton, former Head of Spot FX at an affiliate of Barclays PLC, were alleged to have conspired to manipulate the FX market by "coordinating their bidding, offering, and trading" at "certain times."2

However, a federal jury in New York rejected the government’s claim and acquitted all three of the individuals. The panel discussed this significant criminal antitrust trial, each side’s case-in-chief, key issues of the trial, and takeaways.

The Panelists

  • Andre Geverola is the Director of Criminal Litigation for the Antitrust Division of the U.S. Department of Justice. As Director of Criminal Litigation, Mr. Geverola supervises all criminal litigation and trial matters across the Antitrust Division’s five criminal sections. Mr. Geverola has worked at the Antitrust Division since 2007, where he worked as a trial attorney and as Assistant Chief in the Chicago office. In these roles, Mr. Geverola led numerous investigations and prosecutions of companies and individuals in a variety of industries. Before joining the Antitrust Division, Mr. Geverola worked in private practice at an international law firm where he represented companies and individuals in government investigations and litigation.
  • Heather S. Nyong’o was trial counsel for defendant Rohan Ramchandani. Ms. Nyong’o leads WilmerHale’s California Cartel Enforcement Practice. She is an experienced litigator and first chair trial lawyer. Her more than 17 years in the white collar and antitrust space includes a tenure in the Antitrust Division of the U.S. Department of Justice. She has led noted complex cases and also represents individuals and corporations in non-public grand jury investigations. Ms. Nyong’o brings her experience and insight to government investigations including those that result in criminal or civil litigation. She fully serves her clients across every phase of an investigation and litigation, including through trial.
  • David Schertler was trial counsel for defendant Christopher Ashton. Mr. Schertler is widely recognized as one of the top white-collar defense attorneys in the Washington, D.C. area and nationwide. He founded Schertler & Onorato in 1996 and has built the firm’s reputation as a premiere litigation boutique through his broad experience with criminal and civil investigations in trial matters. Mr. Schertler began his legal career as a trial attorney in the Antitrust Division of the U.S. Department of Justice. He became an Assistant U.S. Attorney for the District of Columbia in 1984 and also served as Chief of the Homicide Section of the U.S. Attorney’s Office from 1992 to 1996.

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Case Overview

MR. LYNCH: This was a criminal trial. It had to do with whether or not three executives from traders of foreign currency from London were going to actually spend time in jail in the United States. So the stakes were really quite high, and the case was fascinating.

Let me first talk to you a little bit about what we’ll cover today. I’ll do a quick overview of the case, give a little bit of background. Then I’m going to turn it over to Andre to give the government’s theory of the case and how they presented it, the evidence they presented, and issues at hand. And then I will have Heather and Dave talk about the defense case, because the defense case was quite interesting, had a lot of different issues that I think are pretty noteworthy. And then we’ll talk more broadly about key issues of the trial. And finally, what worked, what didn’t work, why the result was the way it was, and was there surprises or lessons learned. And if we have time, we can even open it up to questions.

Let’s start with a quick overview. The three individual defendants were all former foreign exchange traders, and for those of you who don’t know this market, foreign currency trading is the trading of paired currencies. They were involved in the euro-dollar trade, so they would buy and sell euros and dollars. This was an incredibly large market. Some were upwards of $4 trillion of commerce a day. I think by some measure this was the largest criminal cartel case ever investigated and prosecuted.

The first defendant was Christopher Ashton. The next was Rohan Ramchandani, and then the third was Richard Usher. They had little nicknames, and as you’ll hear, a lot of the evidence in the case was based on what were called "chat rooms." These were text messages that went back and forth every day for years between every trader and other traders in the market. And as you’ll see, there was very colorful chats and lots of body language and nicknames. And I’m going to let Heather and Dave explain those. The three defendants were all British citizens living in the UK. They voluntarily came to the United States to face charges. They could have stayed in the UK. They could have fought extradition and probably successfully, because the UK authorities had investigated this very same conduct and chose not to prosecute. So they willingly came to the United States to face these charges, even though they faced the threat that they could spend many years in jail.

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Who tried the case? The prosecution team was all staffed out of New York field office of the U.S. Department of Justice, JeffMartino, Carrie Syme, Bryan Bughman, and David Chu. We hoped to have David here today, but he’s actually in trial on the second FX trial that’s currently going on in New York. And that trial was delayed a little bit, so he couldn’t make it today. Andre has agreed to cover for both of them. We thank Andre for doing that. On the defense side, Usher was represented by Michael Kendall and Mark Gidley of White & Case. Ramchandani was represented by Heather and Anjan Sahni. We have other members of the trial team here today as well from WilmerHale: Thomas Mueller, Chris Johnstone, and Dan Crump. We’re thrilled to have them. Finally, Ashton was represented by David Schertler and his associate Lisa Manning.

What was the charge? This was a one count indictment. It was filed in January 2017 in literally the last days of the Obama administration. It alleged a per se violation of the Sherman Act, and the allegation was that between the period of 2007 through 2013, the defendants worked as currency traders for separate banking companies in London and participated in a conspiracy to suppress and eliminate competition for the purpose and sale of euros and dollars in the United States and elsewhere. There were three defendants and one cooperator in the interbank chat room, sometimes referred to as, quote/unquote, the cartel, which was obviously helpful to the government and widely cited. But there is a back story to that, which Heather and Dave will explain. Each was the desk head of a euro-dollar FX trading at a major international bank. Rohan was at Citibank; Usher at JP Morgan and Ashton at Barclays. One other member of this cartel chat room was Matthew Gardiner of UBS, based in Zurich. UBS was amnesty applicant. Gardiner cooperated with the government, and he was fully immunized. He played a very central and significant role in the case, and Andre will discuss that. And these were some of the major banks in the euro-dollar trading market.

Before the trial, all the banks plead out and paid $14 billion in fines and civil damages to the U.S. DOJ, the CFTC, and other regulatory agencies. The trial was a three-week jury trial in the Southern District of New York before Judge Richard M. Berman. The government called nine witnesses, including two experts. The defense called two witnesses, including one expert. And the jury deliberated three hours before reaching not guilty verdicts.

It was the first case that actually went to trial. None of the banks chose to fight this case in court. And as I said before, there’s a second FX trial against I think one individual maybe more, going on right now in the Southern District, but not in front of Judge Berman. It’s in front of another judge. With that as background, I will hand it over to Andre to describe the government’s theory of the case, how they tried to prove their case, and what evidence they used.

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Government’s Case-in-Chief

MR. GEVEROLA: Thanks, Niall. As Niall explained, this case arose from our fairly extensive investigation into foreign exchange trading, and it resulted not just in this trial, we have one going on now in New York on different currency pairs. It was actually also related, but a separate trial involving front running that was handled by the fraud section. So this was a large investigation involving many, many parties.

For this particular case, the theory was that when traders agree on their trading strategies and their trading execution, that is a violation of the Sherman Act. What does that mean? Let me give you a couple of examples. One, if a trader agrees to withhold bids from the market for a period of time so as not to bid price up or down against another trader, our theory was that’s a form of bid suppression. So one trader says, hey, I want to stay out of the market. You do the trades that you need to make. And I’m not going to bid price against you. So that’s one flavor. Another flavor is, there is something in the foreign exchange world called "the fix," which is essentially when they set a benchmark foreign exchange price. And the way that that benchmark is set is through a sampling of actual transactions in the limited period of time during the day that I think it’s the same time every day. So part of the case theory was leading up to the fix when this benchmark rate would be set. The traders would coordinate their trading, for example, they would agree to both buy or both sell in an attempt to drive price lower or higher in advance of the fix, which would advantage whatever trading positions they were holding. These were two main flavors of conduct that were presented at trial as violations of the Sherman Act.

In terms of how we presented the case, the main witness for this trial was the one cooperator that Niall mentioned. There were only four members of the cartel chat. I’m sure Heather will tell you all the other names that this chat room had. And, that’s actually a point, an interesting aside, which is to all of us, cartel is a self-explanatory thing, because we’re antitrust lawyers. But to a jury off the street, I bet you if you walked up to somebody and said, "What do you think when you’re thinking cartel?" They’re not going to say antitrust, right? So it’s not as self-explanatory as you might think.

So the case depended in large part on the one cooperating witness, and the other three individuals in the chat were the defendants. He received non-prosecution protection, which obviously played a big role at the trial. In addition to that, to attempt to corroborate him, we did call other witnesses. For example, we called a counterparty, from this area, from CalPERS. He was the head of equities trading at CalPERS and testified about how CalPERS relied on the big banks to execute certain foreign exchange trades and how it depended on those banks to compete for that business and offer favorable pricing on those trades.

We also called two experts. One really just to kind of set the stage and educate the jury on what this market is, what the different terms mean. He didn’t testify as to any of the actual facts at issue, and he was an expert in foreign exchange markets. Our second expert was not an expert in foreign exchange trading, but in data processing. When we are talking about billions of dollars’ worth of trades over x number of years, there is a voluminous amount of data across multiple banks, across the trading platforms. So we hired somebody to process that data and distill it in a way that would be useful. He testified about certain trades made by the defendants around the same time that they were conducting certain chats that were featured at trial to corroborate, here’s what was said and here’s what happened.

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In addition to those witnesses, we had just some kind of more jurisdictional and interstate commerce witnesses from the banks. We also called our FBI agent, the case agent, to bring in some evidence, but I think the core evidence we presented really was the corroborator and the records expert who could kind of corroborate what happened after these communications.

As I mentioned, this was a case based on chats, so some of you working on financial markets cases probably are familiar with Bloomberg chats, which are essentially kind of a running chat room, which I think banks have largely done away with now, at least on an intercompany level. But back then, the use was pretty prevalent. And people from different banks could join and form private chats where they communicate with each other during the course of the day. That was how these defendants and our cooperative communicated day-to-day.

The next set of evidence was the trading records that I’ve already discussed, and next were recorded phone calls. Some of them were during the conduct and some of them postdated the conduct. I think when the investigation started happening in the financial industry there were a couple phone calls involving a couple of the defendants. And, finally, we talked about the cooperator. He obviously had met with the government before testifying and he testified on the Grand Jury. So he had a lot of prior statements by the time he showed up at trial.

This is just an example of what a Bloomberg chat looks like. And if you can read it, trader jargon is almost incomprehensible. There’s a lot of shorthand. There’s a lot of terminology. And it really is tough to understand unless you’re in that market or you can have somebody who can explain it to you. So we tried to distill certain portions that we thought were fairly self-explanatory. In the next slide, I will show you kind of the excerpts we used in the opening. These three slides were taken from the chats and discussed in the opening. Because we thought for a layperson jury, this is something that’s a little bit easier to grasp than a lot of the trader jargon, and supported the government’s theory in the case. I’m sure we’ll talk more about those chats in a bit.

In terms of the trading records, here are some of the exhibits we presented, which showed how the volumes in which these defendants traded. There are also other trading records showing the timing of the trades leading up to the fix. And, finally, this is a quote from Mr. Schertler’s client, Chris Ashton, when compliance had begun looking into this conduct. And it was an oral tape that was played very effectively in closing argument. It’s quite chilling when you hear the defendant’s own voice worrying about getting caught and what’s going to happen.

And, finally, to bring it all together, it was really the cooperator who could explain the chats, what they meant, and how they interacted with each other, and, he was active—in fact, he was one of the founding members of the chat. Mr. Schertler’s client had joined a little bit later. One thing he testified about, which I’m sure we’ll discus further is, you know, is that at the time he was engaged in the conduct he did not know it was wrong. And it was only through self-examination, after working with the government, that he realized that he really shouldn’t have done this. But, ultimately, that was his testimony, and I think the defense can certainly use that. They can explain much better than I can how they used that testimony.

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MR. LYNCH: Heather and Dave, faced with this mountain of evidence of chats of trading of cooperators, what was your approach and what did the defense do?

Defense Case-in-Chief

MS. NYONG’O: This is just a summary of the defense case. We did put on a defense. We, throughout our defense, put in a total of about 30 chats. One of the main themes we put forward is that the government is just showing you snippets. This is a prosecution by sound byte, one team, one dream, the cartel. They are not showing you a lot more. It’s essentially a virtual wiretap on this supposed conspiracy of five years. Everything these men did and said was recorded in this chat room, and in our view, which we explained to the jury, there was zero evidence of an agreement to fix prices or do anything of the sort. It was unfortunate that our clients did refer to the chat room as "the cartel," but also that the thing they were supposedly fixing was actually called "the fix." So I was spreading very early on about the price-fixing jury instruction about the constant reference to fix, fixing the price, and that is literally what they were doing with the fix. So that was a little bit difficult to overcome, among many other things.

So we put on only two witnesses in our case, but actually Matt Gardiner, the cooperating witness, was a powerful witness for the defense. One thing about Matt’s testimony was that we had 302s of meetings. So to be honest with you, when we received those 302s, I was doing backflips. I mean, I wish I could literally do backflips, but virtually doing backflips down the hall because I was overjoyed with what those 302s said. In our view, 90 percent of the 302s was exculpatory and exactly what my client had been telling me for the past five years before indictment. So Matt Gardiner’s testimony was extremely consistent. He was consistent with his Grand Jury testimony, consistent with what he said to the DOJ. And so, a lot of what he said at trial was very beneficial to the defense. At one point when I was cross-examining him, the judge actually pulled me aside to the side bar and told me I was leading the witness too much. And I said, "Your Honor, this is cross-examination." And he said, "well, it seems unfair because he keeps agreeing with you." So that’s to give you a sense of how important Matt Gardiner was to the defense’s case.

We also called our own witnesses in the defense, and that included Michael Melvin who is a professor at the University of San Diego or UCSD. He was sort of an industry expert. He actually worked for many years at Blackrock in foreign exchange and wrote a handbook on foreign exchange. Incredibly gifted witness. Never had testified before. He was not a testifier but did an incredible job. He’s a very credible witness, and it was helpful that he actually worked for one of his supposed victims of this foreign exchange conspiracy and was able to describe exactly how sophisticated clients were in this industry and how they understood exactly what the traders were doing, and that traders’ job was to talk to each other through chat rooms in order to exchange information, in order to do their jobs.

The other witness that we called was Niall’s client, Carly Hosler. She was a trader in foreign exchange. One of the only female traders I’ve ever seen in the entire foreign exchange market, which is to kind of segue a little bit, the jury started out was ten women and two men and moved to nine women and three men. But we had a very heavily, obviously, female jury. And these chats, we had to deal with a lot. These chats had a lot of unsavory language in them, misogynistic language, lots of talk about money. Carly was a woman in this industry, and she had to contend with that, and so she was able to testify really in the shoes of our defendants. She could talk about how she used chat rooms, and how important chat rooms were to her job. And also to talk about how a lot of this is bravado and stupid asinine behavior by bankers.

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So that’s how we called our case, and I’m going to hand it over to Dave in a moment. But I will just talk a little bit about how we started to lay the groundwork for the jury in our opening statements. This is actually a slide that I used in opening, and the idea was to just kind of show the jury the government fundamentally misunderstood how this market worked. The foreign exchange market is not like a market where you can look on the exchange and see what the price of euro-dollars are. Instead it’s just called an over-the-counter market, and traders had a very difficult job of not only trading hundreds of millions of dollars a day, sometimes billions of dollars a day that they were responsible for trading, but they had no place to just to find out how much they were needed to exchange euros to dollars for it.

This is an example of a trader desk. The traders would have these screens, sometimes six, sometimes eight to ten screens. And on each screen, they would then assess different parts of information in order to determine what the market was looking like. So they would go to electronic platforms like EBS. The government tried to indicate that EBS was the entire market here. They tried to show through the expert that these traders controlled all of EBS or some significant portion of the market at certain periods of time of EBS. But EBS was not the only place that foreign currency was traded. It also was traded on Reuters. It was traded on Currenex. And as their own witness, Dr. DeRosa testified at trial, you could go down around the corner of the courthouse and trader A and trader B could just be standing there and make a trade, FX right there on the street.

So there is lots of places that you can engage in this trading, and one of those places were through chat rooms. Chat rooms were set up by the banks through Bloomberg and Reuters. They had terminals that the banks purchased so that the banks could facilitate communication between members, participants in the market, in order to exchange information and oftentimes transact.

So Bloomberg and Reuters would actually have these things called "trader nights" where they would ask all of the traders from the different banks to come down to a pub and meet each other. Because in order to really make use of these chats rooms, they had have some level of mutual trust with each other. They were not competitors. They were the counterparties. That was how we explained it to the jury. If you tell the counterparty you’re open to risk position, meaning this is what I have to sell for my client, there’s a danger that another company could could get ahead of you, go out into the market, and erode the price and actually hurt you and hurt your customer in pricing. So you needed to be able to feel comfortable with the person you were going to share this information with for the purpose of transacting and would not front run you. And you only need to be a front run once to stop that communication with that particular trader.

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So they developed these relationships with each other, and then they would oftentimes call up each other on chat and start discussing market color and so on in order to understand whether the other person has a position and whether they could transact with one another. It was much more efficient to transact in a chat room as opposed to on EBS. I forgot to mention they would also have these squawk boxes, these voice boxes where they could call up brokers and actually trade over the phone or get information over the phone. It was much more efficient to trade in chat rooms as opposed to on EBS. Because on EBS, there was algorithmic traders and a bunch of people who were on there, and once they see a position, they start running and eating away at the price. Whereas if you’re in a chat room, you can just match off. That’s what they were doing. You’ve got this, I’ve got this. Without any harm to anyone, we’re just going to trade off each other’s currency on the other side. And then the customer gets the very best price, most efficient price. So we also presented this in our opening to explain what exactly the purpose of these chat rooms were, which was to share information, get market color. Customers wanted the most information about the market. They would expect you to be talking to their counterparts to get that information. They would use the chat room to match off and transact with one another, and they would spend a lot of their time just socializing and joking around, because they became quite good friends.

Now, I’ll turn it over to Dave to talk about our themes, and then we can look at some of the evidence that we put in.

MR. SCHERTLER: I’ll just build a little bit on what Heather has told you. First, it was a trickily tried case. I thought the government attorneys did a fabulous job. We were working with three sets of defense attorneys. It was a great joint defense team, and I think the critical success to any defense here is making sure that you’ve got good lawyers with all three teams and lawyers that are working together. But my thing in any trial—and I’ve done some antitrust work, but I’ve tried a lot of other cases as well—is you’ve got to keep it simple. You’ve got to develop—we tried to call it a mantra or a theme—and then you just hit that theme over and over and over again. This has got to be a simple theme for the jurors, who in this case were unsophisticated. We kept all the financial people off the jury who can kind of grasp and understand.

We are dealing with a couple of things in this case. Number one, there were no real factual disputes, right? You’ve got chats. We weren’t disputing what our guys said in the chat rooms, and the trades are the trades. Whatever they traded, and who traded what, who traded off with one another. That’s all well-established. So we were not in a position to really dispute the facts. This is one of those cases where it kind of goes to intent and what’s in their mind.

The second thing that—I think this inured to the benefit of the defense, but Heather and Andre both did a fabulous job of describing this business or industry that these four guys were in trading euros for dollars. I’ll confess now. That I still don’t understand what they were doing. I don’t think the jury understood what they were doing. And I thought that was good for us. Look, this wasn’t the classic antitrust case. In the classic antitrust case, I’m always thinking back to Matt Damon in The Informant, that Mark Whitacre and ADM, when he got everybody into those hotel rooms and they sat down and said, okay, this is the price we’re going to charge and these are the customers that you’re going to take. Okay, that we can all understand. This was really complicated, and I think it was actually a big hurdle for the government to be able to explain to the jury just how this kind of fit within our classic conception of what an antitrust violation is, what collusion is. So I think the complexity of their business gave us a heads-up, but again, you know, trying to keep it simple, give the jury some kind of theme that they can hang their hats on when they go back there and say, well, what’s really going on here.

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So we take the undisputed evidence, and this is our theme: it’s not a crime for four competitors to get into a chat room and talk to one another. That’s basic antitrust law. We’ve got a good jury instruction on that. You know what, it’s not a crime for competitors to get together and share information with each other about what’s going on in their businesses. We got a great instruction from Judge Berman. It’s not a crime for competitors to get together and trade off with one another. I’ll buy your euros. I will take your dollars. In fact, that’s a good thing. That could promote competition.

So what’s the crime here? The crime here under the language of our antitrust laws is really, did they actually reach an agreement to coordinate their trades in a way to affect prices, and we said—the mantra was, no, they didn’t do that. They exchanged information and talked to one another. They traded off with one another, but there was never any agreement that they were going to coordinate their trades in a way that would help them by affecting prices. We argued they shared all this information, they were in a chat room, they knew what each other were doing. But they did their own independent trading in their own interest for their own banks, and it wasn’t coordinated.

That was the mantra that we pressed. In opening, you saw why they chatted, and then with the cross-examination, especially of the cooperating witness, Matt Gardiner, and then in closings again, we beat that theme over and over again. And my opinion is that ultimately that resonated with the jury. We really can’t see the solid evidence of an agreement where these guys all got together and said, okay, we’re going to trade in a way that’s going to benefit all of us. And there were a few chats that we were able to highlight in closing statement.

My guy, Chris Ashton, he’s in this five-year conspiracy for seven months. So I’m thinking, well, okay, that’s not that bad. I’ve got the low guy on the totem pole. That’s something else that hurt us a little bit later. There’s a chat on January 6th of 2012. All the guys are in the chat room and they’re all talking about what they’re doing in trading. Now, this particular day is a risky day, so the other guys in the chat room, Matt, Rohan, and Mr. Gardiner, Scott, all say, you know what, it’s a risky day, I’m not going to get involved, Chris Ashton—my client—I’m going to trade my stuff to you. You go ahead and do what you’re going to do. I’m selling to you. I’m backing out.

Now, the government’s theory is they are coordinating. They’re backing out, and they’re giving Chris Ashton all this market power to trade and hopefully make a profit. Now, they back out. He makes his trade. It’s a disaster. He loses all kinds of money, and they started laughing at him in the chat room and saying what numpty (means an idiot). What numpty, what idiot, would do this trading? We came to the jury. We said, look, there’s no coordination here. They are taking advantage of him, selling to him, and he’s going to take all the risk. He’s going to do his own independent trade thinking he may make a profit. And he loses. He’s the numpty. So there you go. No evidence of an agreement to coordinate their trades to try to increase the price. They’re doing this independently.

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And one final thing I will say in the defense before we get to some questions is, Carly Hosler, who Niall represented, was brought to the stand in the defense case. She was one of the two defense witnesses. We had another an expert who I think did a nice job. Carly was the last witness in the case. Carly had this wonderful English accent. She was a trader like our guys. And this was Heather’s idea. It was, we called them "industry practice witness." So she was going to testify about what the practice in the industry was.

Now, I have to confess that in pretrial motions and motions in limine, when the government’s trying to keep her out, I’m thinking, oh, this is going to be a hard climb with Judge Berman. I don’t think he’s going to let her in. He let her in. He let her testify. She gets up, and she did just what Heather said. She was a surrogate for the defendants. If Carly testifies, our guys don’t have to testify because she’s going to say, I was doing exactly what they were doing. We all did the same thing. Nobody thought it was wrong. It was part of the industry practice. Everybody did it. And that’s what she did, and she’s testified to very effectively.

I think this is brilliant orchestration by a terrific trial lawyer, Heather, but she was brought on the stand because she had worked for Rohan Ramchandani, who was Heather’s client. Rohan was her boss, and so we get through all the what did you do in trading, and did you do what these guys did? Yes, I did. And did anybody think that was wrong? We never thought it was wrong. Everybody did it. Our bosses knew about it. And so we got all that in, but at the end, Heather asked some questions about, well, you know my client Rohan Ramchandani. She says, yes, I do. And can you tell us a little bit about Rohan Ramchandani? Apparently, they had this great working relationship. Rohan was her boss. She starts to describe the situation where she got pregnant, and it was a difficult pregnancy, and Rohan was the boss who was just terrific to her, who looked out for her, who made her feel wanted, who helped her through what was a difficult time for her, personally and professionally. She starts to cry as she’s describing her relationship with this terrific boss, defendant Rohan Ramchandani, and I’m looking over at the 10 of the 12 jurors are women, and half of them are crying as well. It was at that moment I thought, okay, I think we’ve won this case.

MR. LYNCH: Well, you also indicated that there was no government objections, because it did veer a little bit off of industry standards, so no harm, no foul.

MR. SCHERTLER: But it was brilliant with the tears flowing from the witness and from the jury. Heather stopped the cross-examination. There was really not an effective cross-examination, and that’s how we ended the case because there was no government rebuttal case. So really moving.

And just another quick side story. Now, keep in mind, you’re calling this witness, and, you know, at the time we didn’t know whether Carly Hosler would be brilliant and save the case for us, which she did, or whether this could be a disaster, whether there’s going to be a government cross-examination at the very end of the case that’s going to sink our case. And we had a lot of tough joint defense meetings late at night, you know, discussing, do we do this or do we not. And at the end, it was a bit of a risk, but we took the risk as you do in all trials, and I think it won the case for us.

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MS. NYONG’O: I did not orchestrate anything, FYI, just the facts. I was just going to show a couple of pieces of evidence real quick. Everyone in this room knows the elements of the Sherman Act per se violation, but we focused on this. When we were orchestrating our defense case, we really focused on just doing our best to disprove each and every element of the offense, that there was an existence of a price-fixing conspiracy, that the defendant knowingly joined that conspiracy. And because this was a foreign conspiracy case, the government had to show that there was a direct substantial and reasonably foreseeable effect on U.S. commerce.

So just as a couple of examples of the testimony that we received that we thought completely disproved the government’s case, I felt was worthy. Rule 29, quite frankly, was first on the existence of a conspiracy. The question was asked of Matt Gardiner, the cooperating witness, would you agree that the person receiving open-risk exposure information, that was your position, benefited because that trader could offer his customers a better execution, a better price, if he did not need to go into the electronic trading platforms, and Matt Gardiner said yes. So the cooperating witness just conceded that the chat room gave customers a better pricing.

Another example is from Carly Hosler’s testimony where she was saying liquidity, which is access to essentially supply in the market. That’s everything to the trader. It’s sound a bit naff, but it’s like the oxygen for a trader. You need it to be able to buy and sell. The more liquidity you have, the better you can execute, the better prices you can show your customers. It brings in more business. It’s everything. So she was hitting on themes throughout her testimony. And thank you, Niall, for preparing her so well, of saying that these were just marketplaces for us to transact and would have more access to the ability to get better prices for our customers and more people that we can trust in order to trade with.

Another, on the second element of the defense—knowingly joining the conspiracy—I asked Matt Gardiner, in the government’s opening statement, they said over and over again, that these guys cheated the market and cheated their customers. They were cheaters, cheaters, cheaters. So my client told me I needed to ask this question of Matt Gardiner, which I did and felt very confident that he would answer in this way. I asked, you know, you didn’t think you were cheating any customers, including U.S. customers, right? And he said, again, I didn’t think I was cheating anyone. The judge was not satisfied with that answer, so he followed up and said, Mr. Gardiner, but you didn’t think you might have been cheating them then, but now you know you were cheating customers, don’t you? And he said, I don’t think I was cheating anybody back then, and I don’t think I was cheating anybody now. I was ready to stand up and ask for Rule 29.

The next one on the second element is a question to Matt Gardiner that I asked him, you weren’t trying to suggest to Rohan to do something that wasn’t allowed, right? This is on the knowingly element. He said, no. You weren’t suggesting to Rohan that you would enter into some agreement to fix prices, were you? And he says, well, at that time I wouldn’t have thought about that.

[Page 65]

So this all goes to the many of our themes about the cooperating witness which is that Matt Gardiner didn’t form the understanding that he had somehow entered into a price fixing agreement until years later and after dozens of meetings with the government.

MR. LYNCH: We’ve been hammering on the government for quite a while. So let’s put Andre on the spot. So, Andre, we have this defense team, good faith defense, everyone does it, it’s not a problem. That’s not a legal defense. That’s more of an emotional one. You also have this attacking of the immunized witness with Matt Gardiner. How did you confront that, how did you deal with that at trial, and if you were to do it again, how would you handle it today?

Commentary and Takeaways

MR. GEVEROLA: Sure. With regards to Matt Gardiner’s immunized status, I mean, it is what it is. He was the only one of the four chat room participants to testify for the government. So it’s not as if you can bring in additional individuals to corroborate him. All you can do is try your best to corroborate him with the documents. With regards to the good faith defense, we did try to exclude that evidence pretrial because despite what that slide says, willfulness is not an element of an antitrust violation. It’s knowingly entering into the agreement. There is no knowledge of wrongdoing or willfulness requirement. So we tried to keep that evidence out. I think largely the judge, for the most part, let it in. So I think that opened the door to a lot of things the defense did at trial.

The Carly Hosler testimony, for example, without kind of a good faith defense, it would not be irrelevant what another market participant happened to be thinking as she was doing what she was doing while the defendants were over here in a chat room. So the ruling on this good faith issue really opened the door to that. And, as Dave mentioned, kind of opened the door to other testimony from Ms. Hosler, including miscarriages that happened while she was at work. I still remember the ending of her testimony, which is probably paraphrasing a little bit. The close of her direct was, oh, and isn’t it a shame that the defendant’s first child was born last week and he missed it because he’s here at this trial.

MR. LYNCH: It was true.

MR. GEVEROLA: I’m sure that was spontaneous.

MR. LYNCH: Well, I would say the last part of her testimony was the result of a poorly chosen question by the government, which is they tried to I think impeach her by saying, isn’t it true you were fired by Citbank, and she said yes, and then Heather got up and said, can you please explain the circumstances surrounding that. And she said, yes, I was wrongfully terminated. I took Citibank to court in London for a wrongful termination suit, and I won, and that ended the trial.

MS. NYONG’O: And I would say that after the government’s cross-examination, the judge told Ms. Hosler that she could leave the stand and that her testimony was completed, and this was, you know, with this hanging out here, were you fired from Citibank? Yes. And I kind of saw the jurors’ faces fall. And he said, you’re excused. And I said, Your Honor, I have redirect. And he said, no, you don’t. And I said, yes, I do. And I grabbed the microphone, and I said, what happened after that? And then she just took it away.

[Page 66]

MR. GEVEROLA: I mean, she was a significant witness for reasons largely outside the elements of the offense, but that’s how it goes with a jury trial. And in terms of things we could have done differently, for one, it would be great to have more witnesses that were part of the conspiracy. That just was not the facts here. It would be great to have cooperatives who pled guilty to the offense, but it was not the facts here. So I don’t think the issues that lead to the result were really issues at trial. Today, it was just really the underlying facts, and this was a tough case from the beginning. We knew that, with the benefit of hindsight, there are probably things you can do on the market that you can always think about after you get an adverse result. I think we could have called more counter-party witnesses just to demonstrate what effects this conduct really had on the market, and as you’ve heard, it’s a very esoteric market. So it’s hard to figure out, well, if they did what they did, who was really hurt by it. So that’s something we thought about, and, you know, again, Judge Berman ruled against us pretrial on the good faith issue. I do believe as the trial went on, he started to doubt his pretrial ruling when he saw the way the case was headed, in terms of what door was opened and where that was going. And I think we perhaps should have renewed that motion to exclude that evidence, certainly before Ms. Hosler testified, because I do think, and just kind of observing the trial, he started to realize, wait, I thought I was making a narrow ruling, but it was really opening the door to all sorts of things.

MR. SCHERTLER: I do have a question for Andre that I think the judge asked, and I don’t know that he ever got an answer. But Judge Berman, an esteemed judge, made a lot of interesting evidentiary rulings in the case. Stuff that I was thinking would never come in was coming in. Stuff I think that should have come in was staying out. But one of the rulings he made is that if we did this thing with calling a witness to talk about industry practice, and basically to say, everything, we were all doing it, and it was all okay. Nobody thought it was a crime. So Judge Berman’s quid pro quo for that evidence being admitted by the defense is, well, then I’ll let the government introduce the evidence of the bank pleas. So all those pleas with all these damning statements of facts of what our guys were doing was going to come in. He had basically given the government the green light. You can introduce that. We thought that was a wrong decision. We thought it was against the tremendous weight of the law about bringing in hearsay statements from somebody else that would be incriminating our guys, violates our Sixth Amendment confrontation right, but the government did not choose to bring in the bank pleas.

And we’re sitting there in a charging conference. So all the evidence is in and now we’re discussing what the jury instructions are going to be. And it’s just the lawyers and the judge. Judge Berman looked at Jeff Martino, and he said, why didn’t you introduce those bank pleas. And I forget what Jeff’s answer was, but I think we all thought you didn’t introduce them because that would be a tremendous risk of being overturned on appeal because this could be considered a violation of their constitutional rights to confront witnesses against them. I don’t know if you can answer the question, though, but it’s still something I think about.

MR. GEVEROLA: I can’t comment on our kind of internal thinking with regard to that decision, but the judge allowed it to happen. We thought about it, and we ultimately decided not to introduce that evidence, and I think this goes with what I was mentioning earlier, which was as the case went along, I do think the judge began to have doubts about his earlier pretrial decisions, letting in the good faith type of evidence, and maybe was trying to find a way to remedy that, those past decisions. And ultimately for this particular issue, he decided not to do that.

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MR. LYNCH: Let me put the defense on the spot then. You had three defendants who were all well-dressed, no prior criminal histories. They looked like upstanding businessmen. You didn’t put them on the stand. What was your thinking on that?

MR. SCHERTLER: Just my general thinking on whether you put a client on the stand or not. It’s always a game time call, right? You get them ready to testify, and what you do is you evaluate how did we do in cross-examining the government’s witnesses. Did we make enough of our case where we can argue it to a jury without having to put our guys on the stand to explain? And I think once we got to the government’s case in chief, I felt that way. I felt we’ve got enough argument that we created with cross-examination of their cooperator, Matt Gardiner, and all the other things that we brought in, that we don’t need to call these guys. I can go and I can make a closing argument based on what I’ve got now, so why take the risk of putting my client on the stand.

It’s always a big risk of putting your client on the stand, especially on the government’s side, they had some people who would be good cross-examiners, but in addition to that, we had a good expert witness. I think the judge didn’t like him, but the jury liked him. And I think he was able to explain what our guys were doing in an innocent way. And then secondly, once Carly testified, she was really like a defendant testifying. She did exactly what these guys did, and she explained what she did and why she did it. It was really a no-brainer at the end of the case. There was no need to call any of our clients and take that risk.

MS. NYONG’O: I’ll tell you, my client really, really wanted to testify, but we kind of struck a deal if I’m able to get these guys to agree to put Carly on the stand, you stand down, because Carly is going to hit this out of the park for you. And he agreed.

MR. LYNCH: Any final thoughts, Andre, you first?

MR. GEVEROLA: Sure. We were disappointed with the result, but obviously, we respect the jury’s decision. But the result of one case doesn’t deter us from being aggressive in other cases. As we’ve talked about, there’s another FX case going on as we speak. There’s also a case going on down the street where the defendant is the former CEO of Bumblebee. Both antitrust cases. So both of those trials are going to be hard fought. Like any trial, there’s going to be a risk of acquittal, but in light of the jury verdict in the Usher case, we did not shy away from continuing to pursue those cases. And we’re not going to shy away from continuing to pursue cases in the future. That’s the risk. Comes with the territory. And finally, I think our prosecutor should be commended for being willing to bring and try the tough cases. The easy thing in FX would have been to walk away with the billion-dollar fines and not pursue who we viewed were the responsible individuals. As prosecutors, our job doesn’t just stop at fines. And that’s a long history we’ve had in the antitrust division, pursuing the responsible individuals, and that comes with a risk of acquittals, and since we’re in San Francisco, historically, what I can think of is that we’ve had a lot of successful investigations here, whether it’s the real estate cases, the LCD cases, the DRAM cases, going back even further. We had tough trials in those cases. We won some. We won a good number, but we did not win them all. We’ve lost cases in those highly successful investigations too. So the fact that you got an acquittal, you lost a trial, does not mean you as a prosecutor did not do a good job. And I’m sure the prosecutors involved in those cases continue to believe to this day that they made the right decisions. That’s the job of a prosecutor, and it’s a tough job, and the folks who do it day in and day out I think should be commended, no matter the result.

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MR. LYNCH: And I think with that we’ll end our program. That’s a really well-stated position with the Department of Justice, a good way to end this trial. Thank you.

[Page 69]



1. Niall E. Lynch is a partner of Latham & Watkins LLP and a member of the firm’s Global Antitrust & Competition and White-Collar Defense & Investigations Practices. He has represented multinationals and their managers in criminal and civil price-fixing investigations by the U.S. Department of Justice and Federal Trade Commission, as well as follow-on civil litigation arising from such investigations.

2. Indictment in US v. Usher, et al., No.1:17-cr-00019, at 4, available at

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