Forex scandal

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The forex scandal (also known as the forex probe) is a financial scandal that involves the revelation, and subsequent investigation, that the world's largest currency trading banks colluded for at least a decade to manipulate and rig the daily foreign exchange rates.[1] Market regulators in Asia, Switzerland, the United Kingdom, and the United States began to investigate the $5.3 trillion-a-day foreign-exchange market after Bloomberg News reported in June 2013 that currency dealers said they had been front-running client orders and rigging the foreign exchange benchmark WM/Reuters rates by colluding with counterparts and pushing through trades before and during the 60-second windows when the benchmark rates are set. The behavior occurred daily in the spot foreign-exchange market and went on for at least a decade according to currency traders.[2]

At the center of the investigation are the transcripts of electronic chatrooms in which senior currency traders discussed with their competitors at other banks the types and volume of the trades they planned to place. The electronic chatrooms had names such as “The Cartel,” “The Bandits’ Club,” “One Team, One Dream” and “The Mafia”.[3][4][5] The discussions in the chatrooms were interspersed with jokes about manipulating the forex market and repeated references to alcohol, drugs, and women.[6] Regulators are particularly focusing in on one small exclusive chatroom which was variously called the The Cartel or The Mafia. The chatroom was used by some of the most influential traders in London and membership in the chatroom was highly sought after. Among The Cartel's members were Richard Usher, a former Royal Bank of Scotland (RBS) senior trader who went to JPMorgan as head of spot foreign exchange trading in 2010, Rohan Ramchandani, Citigroup’s head of European spot trading, Matt Gardiner, who joined Standard Chartered after working at UBS and Barclays, and Chris Ashton, head of voice spot trading at Barclays. Two of these senior traders, Richard Usher and Rohan Ramchandani, are members of the 13-member Bank of England Joint Standing Committee's chief dealers group.[7]

At least 15 banks including Barclays, HSBC, and Goldman Sachs disclosed investigations by regulators. Barclays, Citigroup, and JPMorgan Chase all suspended or placed on leave senior currency traders. Deutsche Bank, continental Europe’s largest lender, was also cooperating with requests for information from regulators.[8][7] Barclays, Citigroup, Deutshce Bank, HSBC, JPMorgan Chase, Lloyds, RBS, Standard Chartered, UBS and the Bank of England as of June 2014 had suspended, placed on leave, or fired some 40 forex employees.[5][9][10][11] Citigroup had also fired its head of European spot foreign exchange trading, Rohan Ramchandani, who was a member of the 13-member Bank of England Joint Standing Committee's chief dealers group.[12] Reuters reported hundreds of traders around the world could be implicated in the scandal.[13]

See also[edit]


  1. ^ Patterson, Jeff (16 January 2014). "Forex Scandal Deepens, Deutsche Bank Moves To Suspend Latin-Based Traders". Forex Magnates. Retrieved 21 January 2014. 
  2. ^ Liam Vaughan, Gavin Finch and Ambereen Choudhury (12 June 2013). "Traders Said to Rig Currency Rates to Profit Off Clients". Bloomberg News. Retrieved 21 January 2014. 
  3. ^ Liam Vaughan, Gavin Finch and Bob Ivry (2013-12-19). "Secret Currency Traders’ Club Devised Biggest Market’s Rates". Bloomberg News. Retrieved 2014-02-03. 
  4. ^ Katie Martin and David Enrich (2013-12-19). "Forex Traders Said to Have Colluded in Effort to Profit". Wall Street Journal. Retrieved 2014-02-03. 
  5. ^ a b "Forex Chatrooms Show Traders Shared Order, Price Details: Report". NDTV Profit. Reuters. 19 June 2014. Retrieved 1 July 2014. 
  6. ^ David Enrich and Katie Martin (2013-11-01). "Currency Probe Widens as Major Banks Suspend Traders". Wall Street Journal. Retrieved 2014-02-03. 
  7. ^ a b Daniel Schäfer, Alice Ross and Delphine Strauss (2013-11-12). "Foreign exchange: The big fix". Financial Times. Retrieved 2014-02-03. 
  8. ^ Gaspard Sebag and Aoife White (19 December 2013). "Banks Said to Snitch on FX Rivals in Race to Avoid Fines". Bloomberg News. Retrieved 21 January 2014. 
  9. ^ Alice Ross, Daniel Schäfer and Gina Chon (2014-01-15). "Deutsche Bank suspends traders amid global forex probe". Financial Times. Retrieved 2014-02-03. 
  10. ^ Nicholas Comfort and Karin Matussek (2014-01-30). "Deutsche Bank Said to Suspend Moraiz in Currency Probe". Bloomberg News. Retrieved 2014-02-03. 
  11. ^ Daniel Schäfer, Patrick Jenkins, Mike Mackenzie, Kara Scannell, Alex Barker, Camilla Hall, Caroline Binham and Delphine Strauss (16 February 2014). "Forex in the spotlight". Financial Times. Retrieved 18 February 2014. 
  12. ^ Bases, Daniel (2014-01-10). "Citi's European spot forex head trader Ramchandani out amid probe". Reuters. Retrieved 2014-02-03. 
  13. ^ Jamie McGeever (2014-01-15). "Deutsche Bank, Citi feel the heat of widening FX investigation". The Globe and Mail. Retrieved 2014-02-03.