A Glimpse Inside The FX "Cartel's" Chat Rooms

First it was Libor, then gold, then dark pools, now for those who want a glimpse into just how for years bank FX traders, whether belonging to "The Cartel" or "The Bandits Club" or otherwise, colluded on trades around the daily fix, breached fiduciary duty, and generally engaged in illegal rigging of the world's largest market by volume, Bloomberg News had received a transcript of the instant-messages by various FX traders currently being investgated for FX rigging.

As Bloomberg news reports, it has "reviewed the transcript of a conversation that spanned about 40 minutes on the condition that neither the traders nor clients named in them would be identified. Another dealer from Barclays and two from Zurich-based UBS AG were logged onto the thread at various points during the chat. The exchanges are the sort of discussions banks are trying to end by banning group chats involving employees at other companies."

Here is glimpse into how yet another market was, and still is, rigged on a daily basis.

“Any fix quid?” a currency trader at Barclays Plc asked a counterpart at HSBC Holdings at 2:25 p.m. on June 23, 2011. “Get 50 cable on fix,” he said as he tried to sell British pounds.

 

“Nothing as of yet mate,” replied the HSBC trader, according to a transcript of the “Sterling Lads” instant-message group provided to Bloomberg News by a person with knowledge of a global investigation into alleged currency-rate rigging. “I hope not either, as everything I touched today has cost me money. I just lost 10k there typing.”

 

A minute after the Barclays trader’s request to sell 50 million pounds ($81 million) in exchange for dollars, the HSBC trader typed, “I can match. 50 quid.”

 

The Barclays trader came right back with “Ta,” an informal way to say thanks.

 

“Rhx in about 50 quid at the fix,” the HSBC trader responded, probably a typo for rhs, or right-hand side, a term meaning he would buy the pounds at the 4 p.m. WM/Reuters rate. The benchmark is based on trades in a minute-long period starting 30 seconds before 4 p.m. in London.

 

“I let u know if i get any more,” the Barclays employee typed. “Can do 58 all day.”

 

After his counterpart said he’d do it, the Barclays trader wrote “actually 59 if ok,” indicating he wanted to sell as much as 59 million pounds.

 

“Fook off,” the HSBC trader wrote back.

 

“59 done thks u helm,” the Barclays trader said, signing off with a slangy British epithet.

And that is how FX is "traded" these days.

More can be found here, but the real question we have is how many, if not all, of the abovementioned anonymous "traders" were part of the alleged, if legendary, Sage Kelly "Defendant's Drug Cohorts."