WEBVTT - Bloomberg Law Brief: Currency Manipulators Charged (Audio)

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<v Speaker 1>Well, now it's time for our daily Bloomberg labbrrief exploring

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<v Speaker 1>legal issues in the news, and today Bloomberg LAJO student

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<v Speaker 1>Grosso and Michael Best discuss charges against currency traders at

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<v Speaker 1>several major international banks who are accused of market rigging.

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<v Speaker 1>To speak with John Coffee, a professor at Columbia University

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<v Speaker 1>Law School, and Peter Henning, a professor ed Wayne State University.

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<v Speaker 1>Peter start us off by explaining what these traders allegedly

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<v Speaker 1>did in the chat rooms. Well, it's fairly simple in

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<v Speaker 1>that they have this spot where each could tell the others, uh,

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<v Speaker 1>at least according to the government, where they wanted the

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<v Speaker 1>price of the dollar in the euro set. So how

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<v Speaker 1>that number is figured out each day and then used

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<v Speaker 1>for various transaction is there is a fix. There is

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<v Speaker 1>a particular point in time when you get a quick

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<v Speaker 1>snapshot of the market and that says this is the

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<v Speaker 1>value of the euro versus the dollar and with other currencies.

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<v Speaker 1>And so they were trading messages back and forth to

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<v Speaker 1>if you will fix the fix and try to have

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<v Speaker 1>it help out their positions because they're at competing banks.

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<v Speaker 1>So theoretically the price really should be set by the

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<v Speaker 1>market this is conspiracy to violate the antitrust laws because

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<v Speaker 1>they're trying to fix the price. Well, John, one of

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<v Speaker 1>the things that's interesting about this case is that while

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<v Speaker 1>they're being charged under US law, British authorities had cleared

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<v Speaker 1>them for this. So how is that possible? Well, of

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<v Speaker 1>course you can offend the laws of two different countries.

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<v Speaker 1>If you shoot a bullet across the state line from

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<v Speaker 1>one state into the next day, those states have jurisdiction

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<v Speaker 1>for what happens because you did something, either the intent

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<v Speaker 1>or the effect was in each jurisdiction. Uh. Now, it

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<v Speaker 1>is true that the US historically has enforced its law

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<v Speaker 1>more aggressively then has Great Britain, and it may be

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<v Speaker 1>that the US has were able to accumulate better evidence.

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<v Speaker 1>I also would point out that this is the last

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<v Speaker 1>days of the Obama administration, and I think they're trying

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<v Speaker 1>to get all the cases though in their pipeline into

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<v Speaker 1>formal arged proceedings, both partly to get credit and partly

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<v Speaker 1>to uh embarrass the future administration if it dropped these cases.

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<v Speaker 1>But I think this was the last chance they had,

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<v Speaker 1>and they took that chance. Because you noticed they haven't

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<v Speaker 1>indicated that any of these people are in custody. More normally,

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<v Speaker 1>you would not indict people until you had arrested them,

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<v Speaker 1>so there was no chance that they would go into hiding.

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<v Speaker 1>That's John Coffee, a professor at Columbia University Law School,

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<v Speaker 1>and Peter Henning, a professor at Wayne State University, speaking

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<v Speaker 1>with Bloomberg Law host Doing Grosso and Michael Best. You

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<v Speaker 1>can listen to Bloomberg Law week days at one pm

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<v Speaker 1>Wall Street Time here on Bloomberg Radio Now. Among the

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<v Speaker 1>top legal stories from Bloomberg Law, US prosecutors have now

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<v Speaker 1>charged a total of six Volkswagen executives in connection with

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<v Speaker 1>a diesel emissions cheating scandal. Their indictments were part of

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<v Speaker 1>a settlement of civil and criminal investigations into the case.

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<v Speaker 1>V W agree to plead guilty to conspiracy and to

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<v Speaker 1>pay four point three billion dollars in penalties. The US

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<v Speaker 1>is preparing to file a complain against China over subsidies

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<v Speaker 1>to aluminum producers. That's according to people briefed on the matter,

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<v Speaker 1>who say the US will complain to the World Trade

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<v Speaker 1>Organization that Chinese subsidies to domestic aluminum makers are suppressing

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<v Speaker 1>global prices of the middle Yeah that's this morning's Bloomberg

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<v Speaker 1>Law Brief. You can find more legal news at Bloomberg

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<v Speaker 1>find exceptional legal research and business development tools there as well.

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<v Speaker 1>Visit Bloomberg law dot com and Bloomberg Enna dot com

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<v Speaker 1>for more information