United States v. Aiyer

Decision Date02 May 2022
Docket Number20-3594-cr,August Term 2021
Citation33 F.4th 97
Parties UNITED STATES of America, Appellee, v. Akshay AIYER, Defendant-Appellant.
CourtU.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.

Joseph F. Bianco, Circuit Judge:

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.

I. The Relevant Market1

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 ("[L]et's take an example ... you want to buy [U.S.] dollars in exchange for ... Canadian dollars .... That exchange ... between United States dollar and Canadian dollars, that's called a currency pair. There are always two currencies because you have got to buy one and sell the other.").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.

II. The Alleged Conspiracy to Restrain Trade

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:

There were times, for example, when a client would call up and ask a number of us in the chat room for the same thing all at the same time, so we would convey to the others what we were being asked, as far as what currency and what size, and then indicate what price we were showing to the client, and in that way we could kind of coordinate what we would show and whether or not we wanted to win the trade and kind of denote who might be the winner of the trade but still maintain the look of a competition in the eyes of the client.
There were [also] times in the course of trading where ... myself and the other guys in the chat room might have the same interest, meaning I might have an interest to buy dollars as well as someone else in the chat room had an interest to buy dollars against a certain currency or we might have the same interest to sell dollars. So one of us would be the one to place the interest in the market so that it didn't give the market the appearance that there were a lot of buyers entering the market at one time, because that might push the market against us and we might buy it at higher prices, meaning it would be unfavorable to us.
[W]e would [also] spoof the market, meaning if someone in the chat needed to buy dollars against a certain currency, I might place offers in the market in order to try to drive the price lower into that person's hands, ... in order to help them out or vice versa. If my friend needed to sell dollars, I might go into the market and place buy orders in the hopes of driving the price higher.

Gov't Supp. App'x at 50–51.

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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