On October 26, a jury in the U.S. District Court for the Southern District of New York acquitted three London-based former foreign exchange traders of price-fixing charges brought by the Antitrust Division of the Department of Justice (the “Division”). On trial were former Barclays trader Christopher Ashton, former Royal Bank of Scotland and JPMorgan trader Richard Usher and former Citigroup trader Rohan Ramchandani. The Division charged the three with one count each of conspiracy, in violation of Section 1 of the Sherman Act, to fix the forex spot market by agreeing not to trade against each other and coordinating their trading. Several other forex traders have been charged and are awaiting trial.

The acquittal comes on the heels of another recent loss by the Division in a high-profile trial: the June 12 decision by Judge Richard Leon of the U.S. District Court for the District of Columbia rejecting, after a six-week trial, the Division’s attempt to block the merger of AT&T and Time Warner.

The forex trial was the culmination of an investigation that began in 2013. The government alleged that the three defendants, along with a fourth trader, Matthew Gardiner—who testified for the government under a nonprosecution agreement—executed the scheme from 2007 to 2013 by using a private, interbank Bloomberg chat room they called “the cartel.” Gardiner testified that the group had a “gentlemen’s agreement” not to deliberately trade to each other’s disadvantage. Division prosecutors alleged that the traders coordinated around two daily “fixes” at which foreign exchange benchmarks were set based on a window of recent trades. The group adopted the slogan “one team, one dream.” Jurors heard audiotapes of the four discussing how they would coordinate their trading. In one tape, Ashton worried that his chats would later, “in the cold light of day,” look “awful.” But Gardiner’s testimony was undermined when he conceded on cross-examination that he had not thought of his actions as criminal until he was under investigation, and that he would have been “amazed” if he had been told that he had violated U.S. law.

The government’s case was further undercut by a defense expert witness who testified that he saw 141 instances in the trading data in which the alleged conspirators actually traded against each other. The defense’s final witness, a former Citigroup trader named Carly Hosler, gave a tearful defense of her former boss, Ramchandani, stating that the chat room was commonplace in the industry at the time and was necessary for the traders—whom she characterized as “counterparts” rather than “competitors”—to interact with each other. The jury foreman said that Hosler had added a “human element” to an otherwise technical trial about foreign exchange markets. In addition, as defense lawyers repeatedly reminded the jurors, the three defendants had waived extradition from the UK and appeared voluntarily in the U.S. to face the charges. The foreman told reporters that, in the end, the jury concluded that there was not enough evidence to convict. After two and a half weeks of trial, the jury needed only about five hours to reach its not guilty verdict.

In recent years, the Division has focused on ensuring that its litigators are “trial-ready.” There are indications that this strategy has paid off. For example, the Division scored two major trial victories in 2017, successfully blocking the Anthem-Cigna and Aetna-Humana mergers, which would have been the two largest health insurance mergers in history. But these two recent high-profile losses are setbacks for the Division’s renewed focus on winning at trial. Speaking at an American Bar Association event on October 31, Andre Geverola, the Division’s director of criminal litigation, stated that the loss in the forex trial will not deter future prosecutions from the Division for antitrust violations in the financial markets.

Companies and individuals facing an enforcement action by the Division must consider the costs and benefits of either pleading guilty or settling on the one hand and going through the expense, delay and uncertainty of a trial on the other. The likelihood of prevailing at trial is a major factor to be considered. If the Division continues to lose significant trials, more companies and individuals faced with an antitrust enforcement action by the Division may decide that the cost-benefit analysis tilts in favor of taking the case to trial.