FX Firms’ Employees Helping FCA And FBI To Investigate Forex Probe

by on September 15, 2014 12:20 pm BST

Britain’s Financial Conduct Authority (FCA) and U.S. regulators are investigating allegations that dealers at major banks colluded and manipulated key reference rates in the $5.3 trillion-a-day foreign currency market, the world’s biggest and least regulated.

Investigators from the U.S. Justice Department and Federal Bureau of Investigation (FBI) are preparing to seek criminal charges against individual traders as early as next month, the Journal reported.

U.S. investigators have turned several bank employees into informants to gather evidence against some of their colleagues in the probe of possible manipulation of currency markets, the Wall Street Journal reported, citing people familiar with the matter.

The WSJ report said it isn’t clear which banks had secret informants cooperating with the government investigation.

Ethical standards in the foreign exchange market have been put under a harsh spotlight since investigators in the United States, Europe and Asia started examining whether small groups of traders colluded to rig prices by sharing information about their clients’ orders.

The global inquiry has not yet concluded but the review has shaken the industry, with dozens of top dealers put on leave or fired and banks under pressure to sharpen up oversight of their traders.

The FBI and U.S. Justice Department were not immediately available for comment outside regular U.S. business hours.