US Offers Immunity To Junior FX Manipulators In Exchange For Ratting Out Their Seniors

Tyler Durden's picture

In another indication that the ongoing FX probe is picking up steam, or at least preparing for primetime public PR consumption, the FT reports that US prosecutors are offering immunity deals to junior traders in London. The quo for this particular quid: rat our the senior staff involved in what has previously been reported to be years of currency manipulation (recall "How Wall Street Manipulates Everything: The Infographics"). And continuing the tradition of the DOJ only focusing on European banks, because apparently nobody in the US ever engaged in manipulation of anything, ever, the "US Department of Justice staff have flown to the UK in recent weeks to interview foreign exchange traders, who have been offered partial immunity in exchange for volunteering information about superiors, people familiar with the situation said."

Previously such a blanket immunity agreement was used by UBS to rat out its peers in the Libor manipulation probe to avoid prosecution. And so piggybacking on bankers' eagerness to expose their former best friends, regulators are going bank to bank and focusing on those most with the most to lose, and most liable to spill the goods: the junior-most traders.

From the FT:

Such “proffer agreements” allow individuals to give authorities information about crimes with some assurances they will be protected against prosecution, as long as they do not lie.


The move marks another step in the global investigation into collusion and market-rigging in the $5.3tn a day currency market by at least 15 regulators and prosecutors. They are investigating allegations that bank traders and sales staff used chat rooms and other means of communication to share client information and manipulate daily currency benchmarks.


Most authorities initially gave banks free rein to conduct their own probes, prompting the suspension, placing on leave or firing of so far almost three dozen staff at 10 banks and the Bank of England, where one official has been suspended.


One senior lawyer said the DoJ probe was well-advanced. The DoJ declined to comment. Referring to general criminal activity, Leslie Caldwell, its criminal division chief since May, told the FT last week that the authority would be “appropriately aggressive” and seek to bring “timely” cases against financial institutions.

On the other hand, showing just how little information, and thus leverage, the DOJ actually has, most such offers have so far been rejected: "while the DoJ had offered immunity deals to a number of traders, most had so far declined as they did not have “killer evidence” to trade against leniency."

Senior bankers, in the meantime, are not waiting to see who folds under pressure first, and as we have reported in the past year, have been leaving their former employers in droves, either heading to hedge funds or leaving the industry entirely. However, since participants of such FX manipulation venues as the "bandits" chat room likely had dozens if not hundreds of participants working in the FX desks at all major banks, all it will take is finding the weakest link and going from there all the way to the top. Unless, of course, the DOJ finds that some of its targets also happen to be major sources of lobby funding, in which case expect the probe to quietly disappear.

Complicating any attempts at covering up impropriety would be disclosures by Germany’s financial regulator and Switzerland’s competition commission which both confirmed publicly in recent months that they have found evidence of wrongdoing.

And then there are the pleas from those at the very top, such as Barclays Chairman Sir David Walker, whose peculiar request we described in "Caught Rigging Gold And Dark Pools, Barclays Begs To At Least Keep FX Manipulation." Yes, really.

One thing is certain: no matter how far any probe goes, those most culpable of FX manipulation, central bankers and the countless HFT algos which have taken over day-to-day FX rigging, will be left untouched. After all, this latest theatrical escapade is just yet another attempt to appease the public by throwing a few pieces of junior trader meat in prison for 2 to 4. Remember that in the case of Barclays gold manipulation, the buck apparently stopped with a very junior trader. Clearly nobody else was involved. The same will happen here.

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BobTheSlob's picture

So let me get this straight: The government is going to prosecute FX traders for implementing government-sanctioned FX manipulation?

Newsboy's picture

Probably just conscripting an army for cyber-warfare in global banking and markets.

ACP's picture

Obviously, the 0bomya regime's global dominance of manipulation is being threatened by Europe.

It's the simplest reason, and fits the pattern of the regime perfectly.

Save_America1st's picture

Nail-guns in...3....2....1....DUCK, BITCHEZ!!!

knukles's picture

Yeah, kinda.
What's happening is that if;
1.) You do it with TPTB's OK or do their direct bidding without getting caught, which includes their regulatory cover, all's good.

2.) If you get too far carried away on your own and/or it interferes with their agenda OR you get caught, then somebody has to pay and it's you who were doing point #1.

3.) It's not personal, it's business.  Capiche?

4.) The after all the shit settles meaning you went through a ton of legal fees and bad press, as well as hearings, you get fined, are subjected to some horseshit new regulations that do nothing more than add additional paperwork AND you get to pay more and on going additional campaign contributions

5.) Capiche?  Now it's just an ongoing open cost of doing business AND if you fuck with us

6.) Then it gets upfront nail-gun personal

jaxville's picture

It's just a semi annual cull.  Remember.....Justice /gov't persecution is reserved for the Goyim.

booboo's picture

Bullshit, DoJ is trying to find out who knows what in order to get in front of their narrative. Corrupt motherfuckers.

Newsboy's picture

Getting out front is good, but the US is putting together a cyber-financial-NSA-Blackwater kinda' unit, ya'know. How you gonna get all the most experienced guys quick enough?

SoilMyselfRotten's picture

Draining the entire swamp seems apt

NoDebt's picture

THat would be racist against mosquitos, not to mention in violation of about a thousand wetlands regulations from the EPA.  We need to send more aid for the people who have been bitten and suffered the consequences of the mosquito bites, since they are the innocent victims here.  If you even THINK about touching that swamp, you'll find yourself at gunoint, thrown in jail and denied access to your mosquito bite treatments.

ONLY the government can help.  Not you.  We need new laws, new regulations and new bureaucracies.  Hell, we need a whole new damned 3-letter agency to deal with this problem.

emersonreturn's picture

bob you're wanted on another thread...

LetThemEatRand's picture

Intercom:  "Paging Bob on the White courtesy phone."

Bob [picking up red courtesy phone]:  "this is Bob."

Red courtesy phone:  "no, the white one."

Urban Redneck's picture

Unless one has a life insurance policy implicating William Dudley in f/x manipulation or other financial crimes, there is no immunity from US prosecution. Prosecutors are liars.

Flagit's picture

Let ME get THIS straight,


U.S prosecutors......London.


again...U.S prosecutors........London.

Postal's picture

Since when are thugs bothered by simple things like national sovereignty?

bitterwolf's picture

shut up and keep typing Kafka

TeamDepends's picture

Immunity = Bungholed Later

RacerX's picture

Just a reminder that it's bad when the other guys do it.

I am Jobe's picture

Just donate to Chucky Suck Ass Schumr and get your day at the Hamptons party. 

wee-weed up's picture

Chucky Suck Ass Schumr...

What a slimy holier-than-thou schmarmy douchebag!

buzzsaw99's picture

Most authorities initially gave banks free rein to conduct their own probes...

Yeah so they could unleash the nailguns!

RaceToTheBottom's picture

They must be going after European banksters only because the data that they base their charges on comes from the NSA and the NSA doesn't gather data in the US....

paint it red call it hell's picture

"US prosecutors are offering immunity deals to junior traders in London"

And then identity of those initially willing to talk is leaked to financiers of the suicide teams which silence their big mouths sending a message to peers with less ethical fortitude.....

I am Jobe's picture

They have already made a call with the FBI. Poor guy should have used the nail gun. 

Tabarnaque's picture

Exactly what I was thinking. These traders will exchange immunity against a nail gun or a free ride off a high rise balcony.

Atomizer's picture

Glad to see the opening of Pandora's box.

bunnyswanson's picture

Added to this:  WTC 7 Safety Initiative and there may be a moment of clarity available for anyone paying attention.

post turtle saver's picture

now we know what a Canary Wharf in a coal mine feels like

tmosley's picture

Long nail guns.

AllWorkedUp's picture

What a fucking joke. When the junior FX traders rollover, what will the DOJ do to the seniors? Slap a little fine on them? Give them their blessing?

tlnzz's picture

Uh oh. Looks like suicide deaths by self inflicted nail gun will be on the rise. Either that or peter pan jumps out of high rise buildings.

lasvegaspersona's picture

Since all currency manipulation is done by and for the country which runs the currency, I have to say...'this is odd'.

NoWayJose's picture

If there actually were a couple of bankers (or IRS IT staff) in jail, there might be a little more incentive to tell the truth.

Save_America1st's picture

Why aren't prosecutors investigating and getting warrants against the foreign-owned, private, non-government, non-Federal Reserve who has manipulated the U.S. currency down to 98% less than it was 100 years ago, causing massive inflation, poverty, and a sociopathic elite class who gain all the tangible wealth and power at the expense of the impoverished 99%???  Hmmm???  Instead they try to head-fake us by going after some nobodies in London???

Otto Zitte's picture

Begin a new life in Levinworth with Chelsea Manning... 


The 'prisoners dilema' is well known by the Bankster litigators and the Banksters will never get touched no matter how much the Gubberment

litigators attempt to put the screws to them. Plausible deniability is the

Banksters best bud aside from their litigators. The wealthy never go to jail

until one removes their wealth from them. Bernie Madoff was not wealthy

and neither was Jeffrey Skilling. When the motherfuckers lose their money that's when BIG law says chuck you farley and Jurisprudence does her little dance on their heads.

TeethVillage88s's picture

Do it Right?

Presidential State of the Union Speech, followed by Senate Majority & Minority Leaders, and House Majority & Minority Leaders... all on record about the Current US Economic & Labor Conditions.

Then they present their case for Importing Labor from Latin America & China during a US Labor Crisis, Time of Great Debt, Time of Money Supply Expansion, Time of Financial Cycle gone wild while being invisible with Derivatives, and... while Big TBTF Banks invest in Overseas Projects or In Stock Buy Backs instead of Funding Capital Formation in CAPEX Expansion of US Businesses. Simple Right?

We want to Fix our US Economy & Jobs Situation, then we have to start with "Real Economic Facts", the Background, the things the Fed has been doing, Past Legislative Efforts, the Follow up on past Legislative Efforts in terms of enforcement/funding/spending/monitoring/and success, and looking back on Glass-Steagal.

Amnesty is a Spending Bill. It is complicated and there are a lot of numbers. Mean while citizens are required to pay penalties for not enrolling in ACA. Oh but 92 Million people are not working. So how do you find jobs for 15 Million Immigrants?

Don't Piss on my back and Tell Me it is Raining!

Business can be handled professionally. That means with out Lobbyist Writing the Bills and without Lobby Money. That means without the distraction of people trying to set up office visits to discuss Lobbying and their contribution.

Time is Ripe for a US Military Coup.

I'm not asking for it or know anyone of that mind set. But look at the Exponential Debt (both Public & Private), look at the Exponential Money Supply Growth, look at the Labor Supply Crisis, Look at the Prohibition in Congress for Discussing US Jobs & US Protectionism, Look at the Asinine Military Spending & Wars, Look at the Asinine Bank Bail-Outs with out damage to their Credit or Federal Contracts.

Now look at the Prospect of US Individual Savings Accounts Deposits being used to bail out insolvent Federal or TBTF Banks.

It is a Mind Control Experiment put on through Propaganda and control of the Press. There has already been a Coup on our Free Press. They even laid off the Investigative Reporters.

The Government has Lost Touch. And it can't Get up.

grekko's picture

I don't believe that anyone is going to spill the beans, not with the new normal of suicided bankers.

EBT excepted's picture

Kewl, grant immunity to rat out those with immunity.  All immune now.  No clapping in irons, no frog march, nada...all show...but it pays well...