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Judge Uses Rare Move to Throw Out Case Against Barclays Trader
March 4th, 2019
A federal judge in San Francisco took the rare step Monday of dismissing a market manipulation case against a Barclays trader before the jury rendered its verdict, a decision that will prevent federal prosecutors from filing an appeal.
The judge, Charles R. Breyer, found that prosecutors had not proved their case against Robert Bogucki after several days of testimony.
Defense lawyers routinely ask a judge to dismiss charges after the prosecution presents its case, but judges usually rule on the request, called a Rule 29 motion, only after the jury reaches a verdict. Doing so permits prosecutors to appeal in the event the judge does dismiss the case.
“It’s over, and there cannot be a retrial,” said Daniel Silver, a partner with Clifford Chance in New York who was previously a federal prosecutor in Brooklyn. “Very unusual result.”
Judge Breyer dismissed seven charges of wire fraud and conspiracy to commit wire fraud against Mr. Bogucki, a top foreign exchange trader in New York for Barclays.
Mr. Bogucki was indicted last year in what prosecutors said was a so-called front-running scheme that had enabled Barclays to make money at the expense of one of its corporate clients, Hewlett-Packard. Front-running occurs when traders use confidential information to make profitable trades against a client or other traders in the market.
The case centered on work done as part of Hewlett-Packard’s 2011 acquisition of Autonomy, a British software company. Barclays carried out a large and complex options and currency trade as part of the deal, and prosecutors said Mr. Bogucki had misused his knowledge of the deal to make millions of dollars for the bank.
In a written explanation of his decision, Judge Breyer said that “no jury could reasonably find that defendant Robert Bogucki made material false or fraudulent pretenses, representations or promises” to Hewlett-Packard, which would later split into HP Inc. and Hewlett Packard Enterprise.
The decision to grant the Rule 29 motion by Mr. Bogucki’s lawyer, Sean Hecker, demonstrated the challenge that prosecutors face in securing guilty verdicts against individual Wall Street bankers.
During the trial, prosecutors introduced transcripts of chats involving Mr. Bogucki and other traders in which one talked about how they would “spank the market” and another trader said they would “hammer the market lower.” The authorities said the chats and texts, taken together, showed an intent by Mr. Bogucki and others at Barclays to manipulate the options market to the detriment of Hewlett-Packard and the benefit of the bank.
But Mr. Hecker said the case showed that prosecutors did not understand the way the option and foreign exchange markets worked, and that the judge had recognized that fact.
“Mr. Bogucki did his job and did it exceptionally well, providing the best pricing on the market to a bank client while protecting his employer,” Mr. Hecker said.
The Justice Department said it was reviewing the order.