📈 69% of S&P 500 stocks beating the index - a historic record! Pick the best ones with AI.See top stocks

Neil Phillips faces trial over alleged forex market manipulation

EditorAmbhini Aishwarya
Published 10/10/2023, 07:12 AM
© Reuters.
USD/ZAR
-
JPM
-
MS
-
NMR
-

Neil Phillips, co-founder of Glen Point Capital and former hedge fund chief, is set to face trial next week in New York over allegations of manipulating the foreign exchange market tied to a $20 million transaction handled by Morgan Stanley. The bank's involvement in the case was disclosed during an indictment revelation amid a dispute over expert witnesses.

Phillips' trial strategy includes bringing forward a former JPMorgan Chase & Co. (NYSE:JPM) trader to testify in his defense. This move emerged during a disagreement over expert witnesses, including ex-JPMorgan trader Andrew Newman, who will argue that Morgan Stanley should have hedged against the option involved in the alleged manipulation.

The prosecutors accuse Phillips of commodities fraud, alleging he directed $725 million in trades to inflate the South African rand's value against the US dollar (USD/ZAR) with the aim of triggering the option at a barrier rate of 12.50 rand (USD1 = ZAR19.1782). This trial may determine the legality of "barrier chasing," which Phillips argues is standard trading practice.

Glen Point Capital purchased the option through an intermediary and identified JPMorgan as its prime broker. Nomura Holdings (NYSE:NMR) Inc. managed Phillips' trades, and US District Judge Lewis Liman will oversee the expert testimony hearing.

Phillips was arrested in Spain in 2022 and extradited to the US to face these charges. The prosecutors have withdrawn the most serious wire fraud charges against Phillips, but he still faces a potential 10-year prison sentence if found guilty of these allegations.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.