Lawsky Presses Institutions Over Trading Practices

by on February 7, 2014 6:14 pm BST

Superintendent of New York’s Department of Financial Services, Benjamin Lawsky is pressing over a dozen financial institutions for documents related to their currency trading practices. The probe is at least the 12th opened by regulators throughout Europe, Asia and the United State since Bloomberg News broke potential currency manipulation last summer.

Lawsky has jurisdiction over institutions that conduct business in New York, including international firms. The regulatory pressure is hitting the industry hard. “Currency traders are now sitting in an unprecedented and unwelcome spotlight,” said John Purcell, CEO of Purcell & Co. Purcell gave insight that the regulatory pressures are hurting the reputation on the industry and those not related to regulatory probes.

Among the institutions asked to turnover documentation are Deutsche Bank, the largest global currency dealer, Goldman Sachs and Citigroup. Other institutions include Standard Chartered and Credit Suisse. Over 16 traders have been put on leave or fired since the probes first began, but now many are beginning to leave on their own volition. Deutsche Bank has fired three New York-based traders dealing with improper communications, as well as a trader based in Argentina.

Citigroup’s head FX dealer Anil Prasad will leave the firm to “pursue other interests,” according to an internal document. Goldman Sach’s traders Steven Cho and Leland Lim left on their own, too.

Lawsky will examine documentation to uncover possible wrong-doing. He cannot bring criminal charges, but he will make referrals to prosecutors.