The former head of U.S. foreign exchange trading at Barclays has been charged with defrauding Hewlett-Packard Co. by manipulating the market ahead of its $11 billion acquisition of Autonomy Corp.
Robert Bogucki, 45, faces seven charges over his role in the scheme, commonly known as “front-running.” It is a method in which a broker makes personal trades based on advanced knowledge of a client’s activities.
Hewlett-Packard hired Barclays as an adviser on the 2011 Autonomy deal. As part of the agreement, Mr. Bogucki was required to sell 6 billion British pounds worth of options. to protect Hewlett-Packard against adverse move in the currency markets. However, the Justice Department alleged he shared the confidential information with others, who traded for their own profit and to decrease the value of Hewlett-Packard’s options.
“Robert Bogucki and others allegedly not only betrayed his client’s confidences, but also risked undermining public trust in the foreign exchange options market,” said John P. Cronan, acting assistant attorney general.
The Justice Department has charged Mr. Bogucki with one count of conspiracy to commit wire fraud and six counts of wire fraud. He will make his initial court appearance Wednesday before U.S. Magistrate Judge Cheryl Pollack of the Eastern District of New York.
In a statement, Barclays said it has been cooperating fully with the Justice Department.
“This incident involved s single transaction from 2011 and predates the extensive improvements to the conduct and controls procedures we have made since 2012,” the company said. “Barclays condemns any behavior that violates our strict rules around client-confidentiality and our client-centric approach.”
Mr. Bogucki is the third senior executive at a British bank to be charged in a front-running scheme. Mark Johnson, HSBC’s former head of global cash foreign exchange trading, faces up to 20 years in prison after he was found guilty in New York in October on nine counts of defrauding a client. Stuart Scott, a British-based HSBC employee, is facing extradition to the U.S. for similar charges.
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