Neil Phillips, the founder of hedge fund Glen Point Capital, has been charged with committing forex market manipulation and fraud, according to the U.S. Department of Justice.
Phillips, 52, has been accused of carrying out a scheme to “artificially manipulate” the exchange rate of the currency pair USD/ZAR (South African rand) to trigger a $20 million payout in an options contract, a Sept. 1 DOJ press release said.
He was arrested last week in Spain at the request of the United States.
In late October 2017, Phillips bought a digital option for USD/ZAR set to expire on Jan. 2, 2018. The option contract had a barrier rate of 12.50 ZAR to USD and a notional value of $20 million, meaning that if the USD/ZAR exchange rate were to fall below 12.50 before Jan. 2, Phillips’s hedge fund would be entitled to a payment of $20 million….