Barclays Currency Trader Cries Foul on Indictment Tactic

(Bloomberg) -- A Barclays Plc foreign-exchange trader accused of defrauding Hewlett-Packard Co. is challenging his U.S. indictment with an unusual legal theory, claiming prosecutors abused an international-document request to extend the statute of limitations on his actions.

Robert Bogucki, who was head of currency trading in New York for the bank in 2011, was indicted last month by a grand jury in San Jose, California, for trading that year, beyond the standard five-year period to bring charges. He pleaded not guilty and remains employed by Barclays.

He was charged with conspiracy and wire fraud for his conduct when Hewlett-Packard sought to convert dollars to pounds as part of its planned $11 billion acquisition of Autonomy Corp. Prosecutors allege Bogucki and others misled Hewlett-Packard employees about the foreign-exchange market in an attempt to maximize the bank's profit from the currency transaction.

In a court filing this week, Bogucki's lawyers accused the government of using a procedural dodge in mid-2016 to artificially extend the time they would have to build a case against him. The government filed a Mutual Legal Assistance Treaty request that covered documents from Barclays's London headquarters, according to the filing.

Standard Procedure

Overseas document queries are standard procedure in U.S. investigations involving international banks, allowing prosecutors to see sensitive data from foreign lenders that otherwise would be off-limits. Because the requests take months, and sometimes years, prosecutors often receive an order from a judge allowing them to pause the statute of limitations.

Bogucki's lawyers argue that prosecutors misled the court since the document request wasn't necessary to build the case and was filed simply to extend the clock. Portions of Bogucki's filing, from defense lawyers at Debevoise & Plimpton and Clarence Dyer & Cohen, were redacted, since the argument referred to unrelated investigative work done by the Justice Department.

Justice Department representatives declined to comment.

U.S. authorities have been pursuing criminal prosecutions following a global crackdown on currency rigging that saw banks pay more than $10 billion in penalties. 

At least eight traders have been charged over behavior uncovered in the scandal, including three from JPMorgan Chase & Co., Barclays and Citigroup Inc. They're known as the “Cartel,” and are scheduled to go on trial in New York in June. In October, former HSBC Holdings Plc currency trader Mark Johnson was found guilty of fraud for front-running a $3.5 billion client order.

The case is U.S. v. Bogucki, 18-cr-021, U.S. District Court, Northern District of California (San Jose).

To contact the reporter on this story: Greg Farrell in New York at gregfarrell@bloomberg.net.

To contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net, David Glovin at dglovin@bloomberg.net, Paul Cox

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