United States v. Aiyer
Decision Date | 02 May 2022 |
Docket Number | 20-3594-cr,August Term 2021 |
Citation | 33 F.4th 97 |
Parties | UNITED STATES of America, Appellee, v. Akshay AIYER, Defendant-Appellant. |
Court | U.S. Court of Appeals — Second Circuit |
Mary Helen Wimberly (Stratton C. Strand, Kevin B. Hart, Eric Hoffman, Philip Andriole, on the brief), United States Department of Justice, Antitrust Division, for Richard A. Powers, Acting Assistant Attorney General, Washington, DC, for Appellee.
Martin B. Klotz, Willkie Farr & Gallagher LLP, New York, NY (Joseph T. Baio, Jocelyn M. Sher, Willkie Farr & Gallagher LLP, New York, NY, Mark Stancil, Willkie Farr & Gallagher LLP, Washington, DC, on the brief), for Defendant-Appellant.
Before: Parker, Bianco, and Menashi, Circuit Judges.
Defendant-Appellant Akshay Aiyer appeals from the October 2, 2020 judgment entered in the United States District Court for the Southern District of New York (Koeltl, J. ), following a jury trial, convicting him of conspiracy to restrain trade in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. Specifically, Aiyer was convicted for his participation in a conspiracy to fix prices and rig bids in connection with his trading activity in the foreign currency exchange market. His primary argument on appeal is that the district court erred by failing to consider his proffered evidence that the alleged illegal trading activity lacked anticompetitive effects and had procompetitive benefits and by refusing to conduct a pre-trial assessment as to whether the per se rule or the rule of reason applies in this case. Aiyer further contends that the district court abused its discretion in largely precluding his competitive effects evidence from admission at trial and in conducting only a limited post-trial inquiry into allegations of juror misconduct. We hold that the district court was not required to make a threshold pre-trial determination as to whether the per se rule or the rule of reason applies to the alleged misconduct in this criminal antitrust case. The grand jury indicted Aiyer for a per se antitrust violation and the government, which was proceeding only under that theory, was entitled to present its case to the jury. The district court properly assessed the sufficiency of the evidence of the alleged per se violation at the time of Aiyer's Rule 29 motion after the government rested its case (which Aiyer renewed after trial), and the sufficiency decision upholding the verdict is not challenged on appeal. In addition, given that the case was being tried under the per se rule, the district court acted within its broad discretion in strictly limiting the admission of Aiyer's competitive effects evidence at trial to the issue of intent. Finally, the district court did not abuse its discretion in ending its post-trial investigation into alleged juror misconduct and concluding there was no basis to vacate the jury's verdict where such investigation included interviewing the accused juror and finding his denial of the allegations credible.
Accordingly, we AFFIRM the judgment of the district court.
This criminal antitrust case arises out of Aiyer's alleged conduct in—and corresponding communications relating to—the foreign currency exchange ("FX") market. Participants in the FX market buy or sell one national currency in exchange for another. In other words, FX trading takes place in currency pairs, where one individual or entity sells a certain amount of one country's currency to another individual or entity that purchases that currency with a certain amount of another country's currency. See Gov't Supp. App'x at 3–4 () .2 The mechanism for pricing in the FX market is known as the "exchange rate," "rate," or "price," which essentially represents the amount of one specific currency that a market participant can be paid in exchange for another specific currency. App'x at 33. As of 2013, trillions of dollars in various currencies were traded across this market each day.
Turning to the market participants themselves, typical customers in the FX market include pension funds, hedge funds, insurance companies, and international corporations. These customers transact with FX traders at "dealer" banks, which are "mostly very large, well-capitalized banks" that "stand[ ] ready to buy or sell foreign exchange upon demand." Gov't Supp. App'x at 15. If a customer wants to make an FX trade, he or she can solicit prices from multiple dealer banks for a given currency pair and then "pick the best price." Gov't Supp. App'x at 36. In this context, potential customers are provided with a "two-way" price quote (or "spread")—the "bid," i.e. , the price at which the dealer bank would be willing to buy a particular currency, and the "offer" or "ask," i.e. , the price at which the dealer bank would be willing to sell a particular currency. Gov't Supp. App'x at 15, 29–30, 113; see also App'x at 34.
In addition to facilitating transactions for customers, dealer banks trade currencies with one another, through employee-FX traders, in part of the FX market known as the "interbank" (or "interdealer") market. Gov't Supp. App'x at 24; App'x at 36. Whether they are competing for transactions with customers or with each other in the interdealer market, dealer banks compete on the basis of price across the FX market.
Notably, unlike markets such as the New York Stock Exchange, the FX market is not centralized; instead, the FX market operates internationally and is almost always open. In the absence of a centralized exchange, trading is conducted in a variety of ways, including directly between dealer banks and customers (or between dealer banks), through brokers, or over an "electronic broking system," such as the "Reuters matching system" (the "Reuters platform").3 Gov't Supp. App'x at 29–30.
Aiyer, along with Christopher Cummins, Jason Katz, and Nicolas Williams (together, the "co-conspirators"), worked as FX traders at different dealer banks where they traded, in varying degrees, Central and Eastern European, Middle Eastern, and African ("CEEMEA") currencies, such as the Russian ruble (or "RUB"), South African rand (or "ZAR"), and Turkish lira (or "TRY").4 The banks at which the co-conspirators worked all competed with each other to win FX customers’ trades.
At various times spanning from as early as October 2010 to at least July 2013, the co-conspirators agreed not to compete with one another in terms of pricing and also to coordinate in order to affect pricing in the FX market. Katz, who pled guilty pursuant to a cooperation agreement with the government, testified at trial that "the point of not competing with each other, that was kind of an undercurrent that would just be there on a constant basis." Gov't Supp. App'x at 157. Communicating through Bloomberg's instant messaging platform ("Bloomberg chat"), among other means, the co-conspirators dispensed with competing for trades—in both the interbank and more general customer contexts—and, instead, coordinated in relation to the timing and amounts of their bids and offers.
As summarized by Cummins, who also pled guilty pursuant to a cooperation agreement with the government, the co-conspirators engaged in, among other things, the following activities in the FX market:
During the relevant time period, the co-conspirators communicated with each other almost every day, and, over time, various members of the conspiracy participated in numerous FX trading episodes in furtherance of their agreement not to compete. These trading episodes shed light upon several aspects of the conspiracy.
First, the co-conspirators’ FX trading activity, as charged in the indictment, revealed their coordinated efforts when competing for customers’ transactions. For instance, on November 4, 2010, Aiyer and Katz coordinated in connection with the prices they offered to a potential customer who was interested in selling Russian rubles. More specifically, when communicating over Bloomberg chat that day, Aiyer and Katz realized that the same customer...
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