Former JPMorgan trader abandons lawsuit against CFTC
Former JPMorgan Forex trader Richard Usher has agreed to terminate his lawsuit against the Commodity Futures Trading Commission (CFTC). This becomes clear from documents recently filed with the Columbia District Court.
The documents state that, pursuant to Rule 41(a)(1)(A)(ii) of the Federal Rules of Civil Procedure, Plaintiff, Richard Usher, and Defendant, United States Commodity Futures Trading Commission, jointly stipulate that the case shall be dismissed in its entirety without prejudice and that each party should bear its own costs.
Usher launched his lawsuit against the CFTC in March 2021. The trader said that the case demonstrates “the Kafkaesque injustice that could result when an agency of the United States Government obstructs a defendant’s request for exculpatory evidence”. This evidence is relevant to a highly punitive administrative enforcement action that another agency is prosecuting.
Let’s recall that the Office of the Comptroller of the Currency (OCC) was pursuing administrative sanctions against Richard Usher, who is one of the traders involved in the so-called “FX Cartel”. A jury acquitted him of criminal charges in 2018, but, despite this acquittal, the OCC continued to prosecute this administrative action against him.
He filed a complaint with the Columbia District Court to enforce a subpoena against the CFTC because it refuses to provide discovery for use in the OCC case. The OCC sought to bar Usher for life from banking and to seize $1.5 million from him. The OCC charged that Usher’s FX trading conduct—the same conduct that was at issue in the criminal case where he was acquitted—caused his bank, JPMorgan Chase, to enter into a settlement with the CFTC. It further alleged that Usher should be held liable and punished for “endangering the safety and soundness” of his bank by “causing” his former employer’s decision to settle with the CFTC.
The OCC’s charges relied, in part, on facts in the sole possession of the CFTC, Usher argues. Thus, the administrative law judge in the OCC case reasonably allowed Usher’s request to issue a subpoena for relevant documents from the CFTC. The subpoena seeks documents regarding the bank’s settlement with the CFTC, so he can contest the allegation that he caused the bank to settle and should be vicariously punished for that.
The CFTC has rejected in its entirety the subpoena from a sister government agency. According to Usher, the CFTC was cavalierly ignoring duly authorized process. In lieu of complying with the subpoena, the CFTC claimed a defendant should file a Freedom of Information Act (FOIA), which is not a meaningful alternative. The CFTC is not above the law, the trader argued.
In short, Usher was displeased that one U.S. government agency (the CFTC) in possession of documents essential to Usher’s defense before another government agency (the OCC) had refused to recognize that enforcing agency’s authority to compel production of such documents.
The plaintiff said that the CFTC’s refusal to produce the documents Usher needs: (a) violates Usher’s due process rights to compulsory process to defend himself; (b) is wrong as a matter of law; and (c) raises separation of powers concerns.
Let’s note that several months after Usher filed his case against the CFTC, the OCC informed Usher that it would unilaterally and voluntarily move to dismiss its action against him with prejudice. The CFTC argued that this makes the case against it moot.