The Gateway to Algorithmic and Automated Trading

Former US head of Barclays FX charged with masterminding front-running scheme

First Published 17th January 2018

Former head of Barclays New York foreign exchange operation indicted for orchestrating multimillion-dollar front-running scheme

The former head of Barclays Capital (Barclays) New York foreign exchange trading operation, Robert Bogucki, has been charged by the US Department of Justice for his alleged role in a scheme to defraud a client of Barclays through a method known as "front-running."

Bogucki is charged with one count of conspiracy to commit wire fraud and six counts of wire fraud. The charges relate to the manipulation of foreign exchange options ahead of an exceptionally large trade by the Hewlett-Packard Company (HP) in 2011.

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.

The foreign exchange transaction required the sale of 6 billion British pounds worth of options, in September 2011 the defendant and other Barclays employees assured HP that they understood the need to keep the planned transaction, which was exceptionally large, and therefore "market-moving," confidential.

Instead, the indictment alleges, 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.

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.

This is the second indictment brought against the head of a foreign exchange desk of a global financial institution related to the Criminal Division's ongoing investigation of fraud and manipulation in the foreign exchange markets. Bogucki will make his initial appearance on 17 January 2018, at 14:00 EST in Brooklyn, New York.

Click here for the indictment

  • Copyright © Automated Trader Ltd 2018 - Strategies | Compliance | Technology

click here to return to the top of the page
content