Former Head Of Barclays New York Foreign Exchange Operation Indicted ($Multi-M Front-Running Scheme)

[nitpicker]

https://www.justice.gov/usao-ndca/pr/former-head-barclays-new-york-foreign-exchange-operation-indicted-orchestrating

Department of Justice
U.S. Attorney’s Office
Northern District of California

FOR IMMEDIATE RELEASE
Wednesday, January 17, 2018

Former Head Of Barclays New York Foreign Exchange Operation Indicted For Orchestrating Multimillion-Dollar Front-Running Scheme

SAN FRANCISCO – Robert Bogucki, the former head of Barclays Capital Inc.’s (Barclays) New York foreign exchange trading operation was charged yesterday in an indictment for his alleged role in a scheme to defraud a client of Barclays through a method commonly referred to as “front-running.” The charges relate to the manipulation of foreign exchange options in advance of an exceptionally large trade by the Palo Alto, California-based Hewlett-Packard Company (HP) in 2011.
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Bogucki, 45, of East Setauket, New York, was charged in an indictment filed in the Northern District of California on Jan. 16, with one count of conspiracy to commit wire fraud and six counts of wire fraud. Bogucki will make his initial appearance on Wednesday, Jan. 17, at 2:00pm in Brooklyn, New York, before U.S. Magistrate Judge Cheryl L. Pollak of the Eastern District of New York.
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According to the indictment, in September and October 2011, Bogucki misused information provided to him by HP, which had hired Barclays to execute a foreign exchange transaction related to the planned acquisition of a UK-based company. Barclays was selected to execute the foreign exchange transaction – which required the sale of 6 billion British pounds worth of options – in September 2011. The defendant and other Barclays employees assured HP and its employees that they understood the need to keep the planned transaction, which was exceptionally large, and therefore “market-moving,” confidential. Instead, Bogucki and other Barclays employees allegedly used the confidential information they received to manipulate the price of “volatility,” a metric that affects the value of foreign exchange options. During conversations with Bogucki, one Barclays trader stated that he and other traders would “bash the sh*t out of” and “spank the market” to depress the price of volatility. Other Barclays traders also discussed “hammer[ing] the market lower” in order to decrease the value of the HP’s options.

The indictment alleges that, as part of the scheme, Bogucki made misrepresentations to HP and its employees about Barclays’ activities and the state of the options market that concealed the self-serving nature of Barclays’ actions. Specifically, the indictment alleges that Bogucki directed options trading in a way that was designed to depress the price of volatility, to the benefit of Barclays and at HP’s expense.
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