US Supreme Court Denies Latest Phillips Appeal
Posted by Colin Lambert. Last updated: June 25, 2026
The US Supreme Court has denied an application from convicted hedge fund manager Neil Phillips to have his case, which found that he deliberately manipulated USD/ZAR in December 2017 to trigger a barrier option when principal of Glen Point Capital.
While the Court did not provide any commentary, it fully backed the decision by a US Court of Appeals to uphold Phillip’s conviction, even though the UK citizen claimed in his appeal that his activities had no impact upon the US or business therein. The Court of Appeals judgement found that Phillipps had failed to meet his burden to show that the original court’s instruction to the jury was erroneous, or that it’s decision that his actions did impact the US was also wrong.
The Appeals Court noted that there was “direct and significant connection with activities in . . . [U.S.] commerce” because the two financial institutions who had obligations to pay out the option were based in the US. One was Glen Point’s prime broker, JP Morgan, the other was the writer of the option, Morgan Stanley.
While Phillips, who was sentenced to two years’ probation and fined $1 million for his actions, failed to win his original appeal, the appellate judge did note that the US authorities were culpable of “overreach” in arguing that the trades, executed by Nomura’s Singapore desk on Boxing Day 2017, were subject to US jurisdiction because they were matched on (then) Fastmatch’s New York engine and Bloomberg messages were backed up to a server in the US.
Equally, in sentencing the original district court judge noted that the “victim” of the action – Morgan Stanley – was a sophisticated player in the market, that could have taken other steps to minimise its risk.
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This is likely to bring an end to this episode, unless, as was the case of the Mark Johnson trial, a judgement elsewhere moves the goalposts and renders the original conviction unfounded. This is unlikely given the damning evidence provided by Phillips’ chats with Nomura about needing a print under 12.50. Whereas many in the industry had severe doubts about Johnson’s conviction, it is hard to find someone who does not feel that Phillips simply did wrong.
Phillips’ main argument in appeal was that the US had no right to try him for trades that did not touch the US per se, effectively, that it didn’t have jurisdiction. Previous history would suggest that the US authorities feel that any trade involving the dollar impacts US commerce, the fact that two US banks were involved, one as prime broker and one as writer of the option, would reinforce that view.
Of course, Glen Point, because it dealt via a prime broker, would not have known that a US bank wrote the option, but ignorance of that fact is unlikely to sway the US legal system. And while the decision of the Supreme Court to uphold territorial jurisdiction over such actions is important for market participants, there is a much more important lesson to be heeded – and remembered – do the right thing!
The FX Global Code was not, to my knowledge, part of the argument of either party to the trial, but increasingly it is being seen as the benchmark for behaviour. Glen Point, in association with the majority of its peers in the hedge fund world, was not a signatory to the Code, but that should not matter, the Code provides guidelines for all market participants, whether they are signatories or otherwise.
A quick read of the Code (and it was in existence at the time of the USD/ZAR trading) would have highlighted that triggering a barrier was poor behaviour and frowned upon. In the normal course of events, perhaps, with another party defending the level, this might all have been lost in the busyness of a day in the FX industry, but yet again, intent was signalled over chats, and the trading took place at a time and day at which it would have stood out like a sore thumb.
At the end of the day, people need to know that while the US authorities’ tentacles permeate a huge chunk of the global FX market, this trial was not really about their ability to bring someone to court – it was all about conduct, and in this case, the guidance over what is right and wrong is not only out there, it’s clear as day.
