U.S. charges Barclays forex trader with fraud

[January 17, 2018]   By Lawrence White

LONDON (Reuters) - The U.S. Department of Justice (DoJ) has charged a Barclays foreign exchange trader over his alleged role in a scheme to defraud a client of the bank, the DoJ said.

Robert Bogucki, the former head of foreign exchange trading in New York for the British bank, is alleged to have manipulated forex options before a large trade by computer and software maker Hewlett-Packard Company (HP) in 2011, using a practice known as "front-running".

Bogucki could not immediately be reached outside U.S. business hours. He is still employed by Barclays but has been on leave since November 2016, according to a source familiar with the matter.

"Barclays has been cooperating fully with the DoJ. This incident involved a single transaction from 2011 and pre-dates the extensive improvements to the Conduct and Controls procedures we have made since 2012," a spokesman for the bank said.

According to the DoJ indictment, Bogucki, a U.S. citizen, is alleged to have misused information provided to him by HP before the company's planned acquisition of a British-based company.

HP hired Barclays to execute 6 billion pounds ($8.3 billion) worth of foreign exchange options as part of that deal. Bogucki is alleged to have made trades ahead of the deal that benefited Barclays at HP's expense.

The Barclays logo is seen in front of displayed stock graph in this illustration taken June 21, 2017. REUTERS/Dado Ruvic/Illustration

"Robert Bogucki and others allegedly not only betrayed his client's confidences, but also risked undermining public trust in the foreign exchange options market," acting Assistant Attorney General John Cronan said in a statement published on the Department of Justice's web site on Tuesday.

Bogucki, who is charged with one count of conspiracy to commit wire fraud and six counts of wire fraud, is due to make his first appearance in court in Brooklyn, New York on Wednesday, the DoJ said.

The indictment alleges that Bogucki and other unnamed Barclays bankers' goal was to enrich the bank and themselves. It says that over 80 percent of Bogucki's 2011 compensation resulted from bonuses for performance.

The indictment is the second brought against the head of a foreign exchange desk at a major international bank, as the U.S. continues to investigate fraud in global foreign exchange markets.

A jury in October found former HSBC executive Mark Johnson executive guilty of defrauding Cairn Energy Plc in a $3.5 billion currency trade in 2011.

(Reporting by Lawrence White; Editing by Adrian Croft)

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