Overheard In The FX Rigging "Cartel" Chatroom: "Mess This Up And Sleep With One Eye Open

Tyler Durden's picture

As promised, the Justice Department has extracted guilty pleas in FX rigging cases involving JP Morgan, Citi, RBS, and Barclays and as we said twice last week and once this morning, the banks received waivers which ensured that none of the penalties that should rightfully be associated with those pleas will actually apply to the banks. 

What do traders say to one another when conspiring to rig a $5 trillion-a-day market you ask?  Here are some examples from the Barclays consent order:

One particular chat room, referred to by the participating traders and other traders as the “Cartel” included FX traders from Citigroup, JP Morgan, UBS, RBS and Barclays who specialized in trading the Euro.


One Barclays FX trader, when he became the main Euro trader for Barclays in 2011, was desperate to be invited to join the Cartel because of the trading advantages from sharing information with the other main traders of the Euro. After extensive discussion of whether or not this trader “would add value” to the Cartel, he was invited to join for a “1 month trial,” but was advised “mess this up and sleep with one eye open at night.”


On one occasion, a Barclays FX trader explicitly discussed with a JP Morgan trader coordinating the prices offered for USD/South African Rand to a particular customer, stating, in a November 4, 2010 chat, “if you win this we should coordinate you can show a real low one and will still mark it little lower haha.” After the JP Morgan trader suggested that they “prolly shudnt put this on perma chat,” the Barclays trader responded “if this is the chat that puts me over the edge than oh well. much worse out there.” 


On June 10, 2011, the Barclays trader stated explicitly in another chat that “we trying to manipulate it a bit more in ny now . . . a coupld buddies of mine and I.”


As the future Co-Head of UK FX Hedge Fund Sales (who was then a Vice President in the New York Branch) wrote in a November 5, 2010 chat: “markup is making sure you make the right decision on price . . . which is whats the worst price i can put on this where the customers decision to trade with me or give me future business doesn’t change . . . if you aint cheating, you aint trying.”


And here's The NY Times summing up what today's hollow admissions and paltry fines actually mean for the banks and traders who engaged in this "brazen heads I win tails you lose" trillion-dollar conspiracy:

For the banks, though, life as a felon is likely to carry more symbolic shame than practical problems. Although they could be technically barred by American regulators from managing mutual funds or corporate pension plans or perform certain other securities activities, the banks have obtained waivers from the Securities and Exchange Commission that will allow them to conduct business as usual. In fact, the cases were not announced until after the S.E.C. had time to act.


And at least for now, the Justice Department did not indict any traders or sales employees whose errant instant messages underpin the criminal cases against the banks. The banks long ago dismissed most of the employees suspected of wrongdoing, though the New York State financial regulator, Benjamin M. Lawsky, forced Barclays to dismiss eight additional employees thought to be at the center of the scheme.

In sum: fines which amount to a tiny fraction of the amount of money that was likely made as a result of gaming the fix, no consequences in terms of curtailing the banks' businesses, and eight new "dismissed" traders who will promptly find other lucrative job opportunities in the still-corrupt world of high finance.

Mission accomplished.

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Dr. Engali's picture

Fines is such an ugly word. Let's just call them "campaign contributions".

PAPA ROACH's picture

Bring back open outcry, kill all algo and whale manipulators

City_Of_Champyinz's picture

Indeed, no more HFT, no more computers entering orders.  The 'markets' need some major overhauls, real people should be entering each and every order...

Perseus son of Zeus's picture

As I said many times. We can have one real market for real humans that trade real products, and one play paper market for all the algos and high flying manipulator Cramer/Ichan types.

Fuck 'em! Kick them out.

MonetaryApostate's picture

The banking collapse ceremony has begun....  *Grabs Popcorn*

MeelionDollerBogus's picture

Looks no different to me than 5 years ago.

angel_of_joy's picture

... bring back open outcry,...

The outcry died a long time ago. Nowadays, most people act like lobotomized zombies who don't give a shit. Sorry to spoil your day...

tjeffersonsghost's picture

Maybe we should think twice about cheering for the dead bankers, they were probably the whistle blowers....

globozart's picture

That shows that blowing a whistle is the wrong way of handling things.

dontgoforit's picture

Take the truth to the 'authorities' who are so deep in the fix they cannot possibly get out....and 'bang' ur dead.

froze25's picture

That my man is the most likely reason.

e_goldstein's picture

Potential whistleblowers. Not one of the fucking banksters has blown the whistle about anything.

Not one.

HungryPorkChop's picture

Mess with the wrong mobster and there's a nail gun, open window or treadmill with your name on it.  Didn't both Harry Reid and the Google spy person have bad run in's with tread mills this year?


junction's picture

Indict the prosecutors for compunding a felony, profiting from the crimes of the banksters now, with payoffs (so-call "fines") and later, with corner office high paying legal sinecures at these crooked banks. 

Calculus99's picture

Americans are the masters at changing less palatable words/phrases into far smoother ones. 

Upset Your Worries's picture

Wednesday's delve into the writings of Shelby Moore (AKA TPTB_need_war), who is developing a genuinly anonymous altcoin/crypto-currency, avoiding the pitfalls of Bitcoin - an evolution.

"....the scenario I envision is some altcoin is going to make a big move during the 2016 - 2017 period. In 2017, BTC will offloaded to the masses coincident with the peaking US dollar and US stockmarket bubbles. That altcoin is going to gain significant early adopter attention, but it will exhale and quiet down a bit (the usual pattern of growth for fledgling upstarts). Then later from 2018 or so, it could become a go to investment as the global economy moves into radical transformation and Bitcoin has already been dumped to the masses..."

The Knowledge Age cares about meritocracy more than it does for non-active knowledge workers to accumulate stored claims on the knowledge of those workers. The Industrial Age required your stores-of-value due to the economy-of-scale required for large fixed capital mass production. We are moving away from mass production towards individualized production and direct sales of knowledge to consumers of knowledge, thus economic decoupling of production from the requirement for stores-of-value.

Most of you stopped following (Martin) Armstrong right at the time he told you gold would decline from $1600 to $1150 (as a first stop on the way to < $1000 probably $850ish). That was right about the time he started to ridicule hard money followers as tinfoil hats. You tuned him out because you didn't want to hear that your concept of money is all wrong.

Money is what ever society values most in the quality of money. It has never been the case that there was one exclusive store-of-value in the universe. I don't know in what absurd bubble of unreality you all could even fathom such a hypothesis?

Even the dollar has not been a universal money and store-of-value, although it has been a dominant one (but not forever). The NWO one-world reserve currency will not be the only store-of-value nor money used on earth.

....a shared unit-of-account is important when liquidity is paramount, profit margins are small, and fixed rates of return dominate. National currencies sufficed because direct B2B and B2C international trade has been insignificant. In a knowledge investing economy, there may be other attributes of money that are more important, such as the inability of money to interfere with freedom-of-production and meritocracy. I assert Bitcoin is losing this fundamental tenet, and as that becomes clear to the knowledge workers, they will leave Bitcoin for money which delivers the qualities they demand.


Last of the Middle Class's picture

You can sleep, just dream of nailguns.

KnuckleDragger-X's picture

These people should be meeting their new roommate "Bubba". Instead, they'll skate away on a huge pile of cash......

Max Damage's picture

And in other news the guy in the London semi was denied bail today. Fucking criminal twats

Keynesians say the darndest things's picture

Bankers threatening to kill to ensure profits? Shocked! Shocked I tell ya

williambanzai7's picture

What kinds of morons call their illegal price fixing enterprise "The Cartel"?

I will tell you what kind. The kind who think they are immune from punishment.

Keynesians say the darndest things's picture

I don't believe they think they are I believe they know they are

Dubaibanker's picture

All you pay is a 5.6 billion dollar fine (maybe 100 or 200 billion in the last 5 years by all banks combined) after earning 1 or 2 Trillion in EXCESSIVE and ILLEGAL PROFITS over 50 years, by cheating all the people (and entire nations) who borrow in USD GLOBALLY!

I want to be in this business too!!!!!

Yen Cross's picture

  Banking is like politics... It's a revolving door.  If these corrupt POS can't find work ripping off Grandma in banking they'll just run for mayor or city council.

buzzsaw99's picture

Gotti was a piker.

diana_in_spain's picture

I used to be a stockbroker.  Cheating was accepted as par for the course as long as you didnt get caught.  And if you got caught you didnt get in trouble anyway, just lost your commission

max2205's picture

Whom ever said justice will prevail was a fucking dumbshit cocksucking liar 

Joebloinvestor's picture

Since Greece is grasping at straws, they should use the FX manipulation as an excuse.

Why the fuck not?

i_call_you_my_base's picture

Please just hang these people.

Fun Facts's picture

Looking forward to crowd sourced bankster nail gun cage matches.

lunaticfringe's picture

Once again, the government extorts fines from felons. The felons are more than happy to pay. None of this fine money ever finds its way to the people who got ripped off.

I am in awe that a party with no standing- the government- can shakedown banks on behalf of the victims- while never, ever remitting so much as a thin dime to any of us.


NoWayJose's picture

One eye open? Don't you usually close your eyes after jumping off a tall building or just before squeezing the trigger on a nail gun aimed at your head?

Banker Buster's picture

at least bar these wannabe traders (more like con men ripping off their clients) from the financial industry.

ch25061's picture

Another possibility is that the "Dead Banker" pandemic might be the result of Street Justice as major aggrieved counter-parties take out different kinds of contracts that are settled only in brain-splatter.

ch25061's picture

And the low-level "clerks" that man the trading desks to carry out these nefarious schemes never think that they may be caught up in the retribution of powerful individuals wealthy enough to command murder with impunity??  These poor, stupid, arrogance-blinded schmucks  think they are Kings whereas in actuality they are just Pawns not of black or white but red.

activisor's picture

Bankers "manipulation" is a euphemism for State sponsered grand larceny.

In any other walk of life, the perpetrators would be put in orange jump suits and marched off to jail.  The banks, and other criminal corporations are above the law.

It has got to end soon.

insanelysane's picture

Madoff - Take investment money and keep it while providing clients with fake statements.

Corzine - Using "client" money to pay off margin calls

Libor/FX Rigging - Manipulating the rates to take a bit of extra vig from the clients.

Only 1 of these is in jail.  Free Madoff or jail Corzine and the banksters.