On July 31, 2018, the High Court of Justice of England and Wales, Queen’s Bench Division, rejected the United States (“U.S.”) government’s request to extradite a former FX trader and the former head of a bank’s foreign exchange (“forex”) cash trading for Europe, reversing a lower court ruling that had granted the request. Scott v. Government of the United States of America
 EWHC 2021 (Admin). The U.S. Department of Justice (“DOJ”) sought to extradite the trader to face ten counts of wire fraud and one count of conspiracy in the U.S. District Court for the Eastern District of New York for alleged forex-rigging. The High Court found that extradition was not in the interest of justice, because most of the harm from the alleged crimes was felt in the United Kingdom (“UK”) and because of the trader’s strong connection with the UK.
As previously reported, the conduct at issue arose after a bank’s forex team was engaged to execute a foreign exchange swap on behalf of a specific client. The client was seeking to exchange approximately 3.5 billion U.S. dollars for British pounds sterling at a designated date and time, following the sale of its stake in a foreign subsidiary. The U.S. government alleged that Stuart Scott and his co-worker, Mark Johnson, used their knowledge of the timing of the client’s upcoming swap in order to manipulate the market for their and their employer’s benefit. Specifically, the traders allegedly had various other traders purchase pounds sterling for proprietary accounts in the period leading up to the planned transaction, and these purchases had the predictable effect of increasing the market price of pounds sterling, after which point the traders were able to make a profit by selling the pounds sterling from the proprietary accounts. The U.S. government further alleged that Scott made false statements to the client designed to cause the client to execute its transaction at a time more favorable to himself, his co-worker, and his employer, and less favorable to the client.
The DOJ arrested Johnson on July 19, 2016, while he was in the United States—shortly before he was due to board a flight from New York to London. Johnson was tried and subsequently found guilty on October 23, 2017 of eight counts of wire fraud and one count of conspiracy, and is currently appealing his conviction.
The bank entered into a deferred prosecution agreement with DOJ on January 18, 2018, pursuant to which the bank agreed to pay $101.5 million in penalties and disgorgement. Additionally, the bank entered into a civil settlement with the client pursuant to which they paid $8 million. Scott v. Government of the United States of America
 EWHC 2021 (Admin) .
As to Scott, who lives and works in the UK, the U.S. government filed an extradition request on January 30, 2017. That request was granted on October 26, 2017 by a judge who rejected Scott’s defense under § 83A(1) of the Extradition Act, which states that “[t]he extradition of a person . . . is barred by reason of forum if the extradition would not be in the interests of justice.”
However, last week, the Queen’s Bench Division overturned Scott’s extradition. Their decision relied heavily on a case decided while Scott’s appeal was pending: Love v. Government of the United States of America
 EWHC 172 (Admin). Love
held that appellate courts deciding cases under § 83A are “entitled to stand back and say that a question ought to have been decided differently because the overall evaluation was wrong,” and can therefore engage in their own balancing of the factors listed in § 83A independent of the District Judge. Love
,  EWHC 172 (Admin) . Based on the new authority allowed by Love
, the appellate judges in Scott
re-assessed the § 83A factors, ruling that Scott should not be extradited for two reasons. First, most of the alleged harm or loss took place in the UK, as that is where the bank’s client allegedly had been defrauded and suffered harm. Second, Scott has a strong connection with the UK: he is a British citizen, resides in the UK, and cares for his children and step-children there. In the view of the High Court of Justice, these two factors, combined with the absence of any significant connection between Scott and the U.S., outweighed any factors supporting extradition, and therefore Scott’s extradition was found to not be in the interests of justice.
The DOJ has already indicated it will appeal the ruling to the Court of Appeal. In the meantime, the decision overturning Scott’s extradition is a strong rebuke to the extraterritorial reach of the investigation.