Foreign exchange traders face criminal investigati
Post# of 4611
Posted On: 07/23/2014 8:08:39 AM
Foreign exchange traders face criminal investigation
Serious Fraud Office launches criminal investigation into "allegations of fraudulent conduct in the foreign exchange market"
By Nathalie Thomas
5:09PM BST 21 Jul 2014
http://www.telegraph.co.uk/finance/currency/1...gging.html
A criminal investigation has been launched into whether a number of traders at top banks colluded to artificially fix rates in the £3 trillion-a-day foreign exchange markets.
The Serious Fraud Office on Monday confirmed it has opened a criminal investigation into “allegations of fraudulent conduct in the foreign exchange market”.
The SFO would not comment further but the probe is understood to involve a number of individuals at several top banks and other financial institutions.
Regulators around the world, including the UK, US, Switzerland and Hong Kong, are already looking into alleged rigging of foreign exchange rates but the SFO’s intervention will mark the first official criminal investigation.
London is where around 40pc of foreign exchange trading takes place and traders are alleged to have colluded via online chatrooms with names such as the “Bandits’ Club” and the “Dream Team”.
Britain’s financial regulator, the Financial Conduct Authority, started a review of the global currency markets last year. The Bank of England has also been dragged into the affair - it has asked Lord Grabiner QC to look into whether any of its own officials were implicated in forex manipulation between 2005 and 2013.
So far more than 25 traders working at a number of the world’s biggest banks have been fired or suspended while regulators around the world continue their investigations.
Concerns revolve around a benchmark called the 4pm “fix”, which is used by pension and insurance funds to dictate what they should pay for foreign currencies.
The London fix started in 1994 and is run as a joint venture between WM and Thomson Reuters. If evidence is found that it was manipulated by traders then it could potentially have cost UK businesses millions of pounds, impacting everything from company accounts to the value of investments.
Bank leaders fear that the forex scandal could balloon to the same scale as the Libor crisis, raising the spectre of further hefty multi-million pound fines for some of Britain’s biggest financial institutions. So far banks involved in the rigging of Libor, the inter-bank interest rate, have shouldered fines amounting to almost $3bn.
Last week, Royal Bank of Scotland chief executive, Ross McEwan, conceded that the alleged forex-rigging scandal has “all the hallmarks” of Libor.
“Unfortunately, I have the feeling that this is a sort of Libor case again,” Mr McEwan told London’s LBC radio station.
http://www.telegraph.co.uk/finance/currency/1...gging.html
Serious Fraud Office launches criminal investigation into "allegations of fraudulent conduct in the foreign exchange market"
By Nathalie Thomas
5:09PM BST 21 Jul 2014
http://www.telegraph.co.uk/finance/currency/1...gging.html
A criminal investigation has been launched into whether a number of traders at top banks colluded to artificially fix rates in the £3 trillion-a-day foreign exchange markets.
The Serious Fraud Office on Monday confirmed it has opened a criminal investigation into “allegations of fraudulent conduct in the foreign exchange market”.
The SFO would not comment further but the probe is understood to involve a number of individuals at several top banks and other financial institutions.
Regulators around the world, including the UK, US, Switzerland and Hong Kong, are already looking into alleged rigging of foreign exchange rates but the SFO’s intervention will mark the first official criminal investigation.
London is where around 40pc of foreign exchange trading takes place and traders are alleged to have colluded via online chatrooms with names such as the “Bandits’ Club” and the “Dream Team”.
Britain’s financial regulator, the Financial Conduct Authority, started a review of the global currency markets last year. The Bank of England has also been dragged into the affair - it has asked Lord Grabiner QC to look into whether any of its own officials were implicated in forex manipulation between 2005 and 2013.
So far more than 25 traders working at a number of the world’s biggest banks have been fired or suspended while regulators around the world continue their investigations.
Concerns revolve around a benchmark called the 4pm “fix”, which is used by pension and insurance funds to dictate what they should pay for foreign currencies.
The London fix started in 1994 and is run as a joint venture between WM and Thomson Reuters. If evidence is found that it was manipulated by traders then it could potentially have cost UK businesses millions of pounds, impacting everything from company accounts to the value of investments.
Bank leaders fear that the forex scandal could balloon to the same scale as the Libor crisis, raising the spectre of further hefty multi-million pound fines for some of Britain’s biggest financial institutions. So far banks involved in the rigging of Libor, the inter-bank interest rate, have shouldered fines amounting to almost $3bn.
Last week, Royal Bank of Scotland chief executive, Ross McEwan, conceded that the alleged forex-rigging scandal has “all the hallmarks” of Libor.
“Unfortunately, I have the feeling that this is a sort of Libor case again,” Mr McEwan told London’s LBC radio station.
http://www.telegraph.co.uk/finance/currency/1...gging.html
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