Serious Fraud Office launches criminal probe into forex manipulation

Investigation into allegations London bankers rigged key benchmarks for profit

The Serious Fraud Office has launched a criminal investigation into allegations London bankers rigged key foreign exchange benchmarks for profit, the agency announced today.

Traders found guilty of illegally manipulating the $5.3 trillion-a-day currency market could face jail and the banking institutions for which they work could also face prosecution.

America’s Department of Justice announced its own probe into alleged manipulation of the $5.3trillion a day foreign exchange market last October. At the same time the Financial Conduct Authority, Britain’s principal financial regulator, launched an investigation. Market watchdogs in Europe and Asia are also involved. The SFO is understood to have been gathering information for several months before formally launching its investigation.

Sources at the SFO said they are working closely with other agencies, both in the UK and abroad, although they stressed the decision on whether to bring criminal charges would not depend on the outcome of parallel investigations.

Earlier this year the Bank of England became embroiled in the forex affair after traders alleged Threadneedle Street officials had been made aware of their practices at a host of market intelligence gathering meetings in high-end London restaurants. The Bank has denied it colluded or sanctioned manipulation, but in March the Bank suspended an official for failing to follow information escalation guidelines and its ruling Court appointed Lord Grabiner QC to look into the claims.

The Royal Bank of Scotland’s chief executive Ross McEwan said last week that the costs of the forex affair for the banking industry could ultimately surpass those resulting from the Libor rate-rigging scandal. “Unfortunately, I have the feeling that this is a sort of Libor case again” Mr McEwan said. “The difference 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”. RBS was fined £35m for Libor abuses. In total banks around the world have paid out more than $6.5bn in fines relating to the affair.

The SFO did not release details on the specific forex manipulation allegations under investigation but the US Department of Justice is examining whether traders from different banks colluded to share information on the spread they were charging large investors and whether they were making trades before booking orders from clients moved markets, a practice known as “front-running”.

Around three dozen traders from 10 multinational banks have so far been placed on leave or sacked over alleged forex manipulation.

The foreign exchange market has a daily turnover volume of around $5.3 trillion and the City of London has 40 per cent share of the world’s currency trading.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Recruitment Genius: Web Developer - PHP

£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...

Day In a Page

Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness
Homeless Veterans appeal: Homeless in Wales can find inspiration from Daniel’s story

Homeless Veterans appeal

Homeless in Wales can find inspiration from Daniel’s story
Front National family feud? Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks

Front National family feud?

Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks
Pot of gold: tasting the world’s most expensive tea

Pot of gold

Tasting the world’s most expensive tea
10 best wildlife-watching experiences: From hen harriers to porpoises

From hen harriers to porpoises: 10 best wildlife-watching experiences

While many of Britain's birds have flown south for the winter, it's still a great time to get outside for a spot of twitching
Nick Easter: 'I don’t want just to hold tackle bags, I want to be out there'

'I don’t want just to hold tackle bags, I want to be out there'

Nick Easter targeting World Cup place after England recall
DSK, Dodo the Pimp, and the Carlton Hotel

The inside track on France's trial of the year

Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
As provocative now as they ever were

Sarah Kane season

Why her plays are as provocative now as when they were written
Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

Murder of Japanese hostage has grim echoes of another killing

Japanese mood was against what was seen as irresponsible trips to a vicious war zone
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore