When Reuters reported earlier today that Anil Prasad [12], the global head of foreign exchange at Citigroup, the world's second largest currency trader, is leaving the bank, our ears perked up. The reason is the news overnight [13]that according to the British financial watchdog, Martin Wheatley, the allegations for FX manipulation, "are every bit as bad as they have been with Libor" which supposedly means they are taking them seriously. Could this departure have anything to do with a probe that has already snared head FX trades at JPM, Deutsche and countless other banks? Well, Reuters promptly clarified that Prasad's departure is not related to the global investigation into allegations of currency market manipulation, a source familiar with the matter said. "Anil's decision is his own and entirely unrelated to the on-going FX investigations," the source said.
So we had little reason to believe that Prasad's departure is tied to the probe... Until we read this:
- GOLDMAN SACHS HEAD OF FX TRADING STEVEN CHO TO LEAVE, DJ SAYS
Specifically, Cho was the global head of spot and forward FX trading.
And right on its heels, this:
- LAWSKY SAID TO OPEN CURRENCY PROBE OF MORE THAN ONE DOZEN BANKS
- LAWSKY SEEKING DOCUMENTS FROM BANKS INCLUDING DEUTSCHE BANK, GOLDMAN SACHS, BARCLAYS, CREDIT SUISSE-SOURCE
- BANKS IN LAWSKY PROBE INCLUDE LLOYDS, STANDARD CHARTERED, SOCIETE GENERALE, RBS-SOURCE
And while we are willing to believe for now that these two shocking top-level departures by the key FX traders at the two most important banks have nothing to do with such chat rooms [14]as the "The Cartel,” “The Bandits’ Club,” “One Team, One Dream” and "The Mafia", we sadly have our doubts.We will reserve judgment until the final Lawsky report is released of course.
One thing is certain: manipulating the USDJPY and its most important derivative: the S&P 500, suddenly became much more difficult.