A criminal indictment has been issued against Robert Bogucki, Barclays’ (BARC) ex-foreign exchange operation head in New York. Bogucki, who is a Barclay’s trader but has been on leave since late 2016, is accused of involvement in a scam to bilk one of the bank’s clients by engaging in front-running. This type of activity usually involves using advance knowledge about an upcoming order and trading in a way to profit from this information.
The criminal charges against Bogucki include multiple counts of wire fraud and a single count of conspiracy to commit wire fraud. His indictment alleges that in 2011, the ex-Barclays forex trader improperly used the information provided by Barclays’ client Hewlett-Packard Company prior to a significant trade. HP had retained the bank to execute the forex transaction, which involved $8.3B of forex options, and that was tied to plans to acquire another company.
Bogucki and others allegedly used the information given to them by HP to manipulate the “volatility’s” price so as to lower the price of the company’s options. The alleged fraud is said to have caused HP millions of dollars in losses.
“Volatility” is the metric that impacts forex options. Barclays is accused of making misrepresentations to Hewlett-Packard so as to benefit the bank.
The DOJ also accused Bogucki of placing the public’s trust in forex options markets at risk. The government’s indictment contends that he and other Barclays bankers, who were not named, sought to make themselves and their employer money by front running. According to Reuters, in 2011, more than 80% of Bogucki’s compensation reportedly came from bonuses.
Last year, a jury convicted ex-HSBC (HSBC) executive Mark Johnson in the criminal front running case against him on multiple counts of fraud and conspiracy. Johnson, a currency trader, was accused of front-running when client Cairn Energy Plc made a $3.5B trade, also in 2011. As a result, HSBC made $8B.
Institutional Investor Fraud
If you are an investor that has sustained losses that you suspect may be a result of front-running or some other type of securities fraud, contact our institutional investor fraud law firm. At The SSEK Partners Group, our front-running investment fraud attorneys represent investors in fighting for their financial recovery.
Former Head Of Barclays New York Foreign Exchange Operation Indicted For Orchestrating Multimillion-Dollar Front-Running Scheme, Justice.gov, January 17, 2018
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