Market Manipulation Probe Escalates; UK Opens Criminal Investigation Into FX Rigging

Tyler Durden's picture

Since we first exposed to the world that yet another market (foreign exchange) was manipulated by nefarious traders over a year ago, the grand total of prosecutions for market rigging is... zero. As Bloomberg notes, however, more than 25 FX traders have been fired, suspended, or put on leave in that same period. While regulators appear incapable of discovering the truth, the market manipulation probes just got serious..."The [UK] Serious Fraud Office has today opened a criminal investigation into allegations of fraudulent conduct in the foreign exchange market."


As Bloomberg reports,

U.K. prosecutors opened a criminal investigation into alleged manipulation of foreign-exchange benchmarks.


“The Serious Fraud Office has today opened a criminal investigation into allegations of fraudulent conduct in the foreign exchange market,” the London-based agency said in an e-mailed statement today.


Authorities around the world have been investigating whether traders rigged the $5.3 trillion-a-day currency market after the Financial Conduct Authority, the British markets regulator, began a review last year. Regulators and prosecutors are scrutinizing allegations that dealers at the world’s biggest banks traded ahead of their clients and colluded to rig the WM/Reuters rate, a benchmark that pension funds and money managers use to determine what they pay for foreign currencies.


More than 25 traders have been fired, suspended or put on leave after the manipulation allegations emerged last year.


While the FCA has taken the lead in probing the allegations in the U.K., the U.S. Department of Justice has been investigating possible criminal angles to the matter since last year. Prosecutors there could bring charges and levy fines in the case as soon as this year, a person with knowledge of the affair said last month.

As The Telegraph adds,

Investigators are expected to examine whether individual traders personally benefited by manipulating benchmark forex prices. It is claimed that traders colluded via online chatrooms in groups with names such as the Bandits’ Club, the Dream Team and the Cartel.


The SFO’s criminal inquiry into alleged currency markets rigging in London, home to more than 40pc of the world’s foreign exchange trading, will join global investigations into forex market abuse by watchdogs across Europe, Asia, and the US.




Asked whether the FX investigation could be a bigger problem for the industry than Libor, Mr McEwan told London’s LBC radio station: "Unfortunately, it has the hallmarks.”


"Unfortunately, I have the feeling that this is a sort of Libor case again. The difference this time is that we haven't sat back and denied it. We've gone into it and are doing the investigation hand-in-hand with the authorities."

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Of course, we strongly suspect no wrongs will be found and no one will be prosecuted (unless some junior trader can be scapegoated for masterminding the entire FX rigging collusion scandal)

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Urban Redneck's picture

Wake me up when the wankers in London start fining US banks...

BaBaBouy's picture

MEANWHILE........ Sorry... Nothing New To Report On The GOLD Fix Manipulation Fiasco.

ShorTed's picture

I notice it's all those traders doing this...never anyone further up the food chain.

Just for good measure, FUCK YOU DIMON!

SilverIsKing's picture

What if the fraud isn't very serious? Who investigates?

(Sorry Conan. Didn't see your post.)

Luckhasit's picture

Don't get upset because I'm richer than you.

pods's picture

London is the center of this whole leveraged shitstorm. I am sure they will be very dilligent in putting an end to this crap.


Ghordius's picture

though NY is the second eye

_ConanTheLibertarian_'s picture

Is there also a Not So Serious Fraud Office ?

SoilMyselfRotten's picture

It's located next to the Department of Redundancy Department.

philipat's picture

Which is next to The Department of Silly Walks, featuring Obozo Golf pictures??

Rodders75's picture

It was all the French of course. Fine them another $11bn. RIP USD

buzzsaw99's picture

when all the central banks do it why can't everyone else? [/rhetorical]

medium giraffe's picture

The Serious Farce Office?  Abandon all hope......

Racer's picture

Any company who employs more than the odd rogue trader who commits fraud should go out of business and the top CEO's personally fined/sent to prision. They would make sure the business was squeaky clean then!

RadioactiveRant's picture

The SFO has a good track record of dropping charges if someone agrees to pay for lunch.

Dr. Engali's picture

It's funny how "rogue traders" only come to light when the trade goes the wrong way. 

Fuku Ben's picture

We were hoping to get the case here in the Minor Fraud Office but for political reasons the big boys wanted to make it look like they're taking this seriously so they called in the Serious Fraud Office.

HamRove's picture

UK Financial Regulators??.....Oh Yes, that's on the third floor in between the office for the Ministry of Silly Walks, and the service where someone will verbally abuse you for a fee.

JenkinsLane's picture

Political theater for the sheeple.

lasvegaspersona's picture

Since 'manipulation' is really just the application of policy in these markets (by the central banks and treasuries of the dollar system) we should probably consider what the real intention of these investigations is. It is highly unlikely a rogue prosecutor has simply stumbled upon a system of control that has been in place for decades. It is far more likely that this is a show trial or a subtle way to announce a policy change.

orangegeek's picture



let's have an investigation


we'll all get into the same room and talk for days


we'll show everyone all our bits


and.....nothing will change


thanks UK Gong Show Office ....ooopsie.....UK Serious Fraud Office

astoriajoe's picture

Look, you can't close a probe with no findings of wrongdoing until you open a probe. geesh.

Joebloinvestor's picture

The most serious fraud is the UK thinking they had regulators watching this shit.

Youri Carma's picture

Recap: Germany finds evidence of forex rate-fixing

Jim Willie on Bankster Suicides: Bankers Were Taken Out to Prevent FOREX Fraud Whistle-blowing!

London FX Investigator-in-Chief Says Nothing Surprises

She has to decide whether traders who exchanged messages in chat rooms with names such as “The Bandits’ Club” and “The Mafia” were colluding to manipulate benchmarks in the $5.3 trillion-a-day currency market.

Superstar FX Trader Whiz-kid Nothing But A Superspending Ponzi Fraud

Royal Bank of Scotland boss Ross McEwan warns allegations of foreign exchange fixing by banks could blow up into bigger scandal than Libor or PPI

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

Goldman Sachs Tokyo FX Salesman Wako Ogawa Said to Resign