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Neil Phillips, co-founder of Glen Point Capital and former hedge fund chief, is set to face trial next week in New York over allegations of manipulating the foreign exchange market tied to a $20 million transaction handled by Morgan Stanley. The bank’s involvement in the case was disclosed during an indictment revelation amid a dispute over expert witnesses.

Phillips’ trial strategy includes bringing forward a former JPMorgan Chase & Co. (NYSE:) trader to testify in his defense. This move emerged during a disagreement over expert witnesses, including ex-JPMorgan trader Andrew Newman, who will argue that Morgan Stanley should have hedged against the option involved in the alleged manipulation.

The prosecutors accuse Phillips of commodities fraud, alleging he directed $725 million in trades to inflate the South African rand’s value against the US dollar () with the aim of triggering the option at a barrier rate of 12.50 rand (USD1 = ZAR19.1782). This trial may determine the legality of “barrier chasing,” which Phillips argues is standard trading practice.

Glen Point Capital purchased the option through an intermediary and identified JPMorgan as its prime broker. Nomura Holdings (NYSE:) Inc. managed Phillips’ trades, and US District Judge Lewis Liman will oversee the expert testimony hearing.

Phillips was arrested in Spain in 2022 and extradited to the US to face these charges. The prosecutors have withdrawn the most serious wire fraud charges against Phillips, but he still faces a potential 10-year prison sentence if found guilty of these allegations.

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