One of the traders named in the foreign exchange rigging scandal that landed banks with huge fines is challenging the decision, saying regulators misunderstood the meaning of chat logs used as key evidence.
Barclays was fined a massive $US2.4 billion (£1.5 billion) by Britain’s Financial Conduct Authority and the New York Department of Financial Services (DFS) in May this year because it had a whole group of, now former, traders manipulating the currency markets.
The FCA, as well as the DFS, managed to fine the bank because of the evidence it gathered through chatroom transcripts between traders. Furthermore, it led to collectively $US5.6 billion (£3.7 billion) worth of fines for Barclays, UBS, Citi, the Royal Bank of Scotland, JPMorgan and Bank of America.
However, one of the former Barclays traders that was named in the transcripts is fighting back in court and is claiming that the FCA’s investigation was based on “incomplete inquiries and misinterpreted evidence.”
The misinterpreted evidence, ex-Barclays and UBS trader Chris Ashton says, is down to the regulator’s inability to under Cockney rhyming slang.
Cockney rhyming slang is a dialect from the east end of London where speakers uses words that rhyme with the word they intend to use. For example, some using cockney rhyming slang would say “apples and pears” for the “stairs” or a “dog and bone” for the “phone.”
Ashton’s lawyer, who spoke on the ex-trader’s behalf in a London court on Wednesday said Ashton had not even been questioned over the evidence relied on by the FCA.
“For there to be public confidence, it is important that regulatory action is based on a sound evidential basis; here we have significant doubts that there was any proper investigation,” said Sara George in the Upper Tribunal court, as reported by the Financial Times.
“It’s quite possible that the settlements — which have had such a disastrous effect on the reputation of the City of London — may simply have been based on a set of facts that simply did not exist.”