Banker arrested in foreign exchange rigging scandal after banks fined £2.6bn

The man was arrested in an early morning raid at his home in Billericay

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The Independent Online

An Essex banker was arrested yesterday during an investigation into the criminal manipulation of the £3.5 trillion-a-day foreign exchange market, the Serious Fraud Office said.

The man, from the town of Billericay, was taken into custody early on Friday morning and it is believed that he is the first to have been arrested in relation to the case after the SFO opened its investigation in July.

“In connection with a Serious Fraud Office investigation, we can confirm one man was arrested in Billericay on 19 December,” an SFO spokesperson said.

“Officers from the City of London Police assisted with the operation.”

The man previously worked for a major city bank, however a City of London spokesperson did not reveal the identity of the banker or whether he was released on bail after questioning.

 

The arrest comes a month after six banks were fined around £2.6 billion in total by US, Swiss and UK regulators amid allegations that lax rules and controls were not effective in preventing traders from profiting from currency manipulation between 2008 and October 2013. The penalties were paid by RBS, HSBC, Citibank, JP Morgan and UBS.

The bankers involved in the foreign exchange rigging used online instant messaging services to discuss their plans with chat names such as “A-team”, “The Cartel” and “The Bandits’ Club”. The conversations between the bankers, some of whom used the name “1 team, 1 dream”, showed one of them saying: “How can I make free money with no fcking [sic] heads up.”

The traders then used private customer order information in plans with other banks to fix currency exchange rates to make themselves and their employers illegal profit at the expense of the market and their clients.

Around 35 bankers have been sacked or suspended, however no arrests had been made until now during criminal investigations currently under way in the US and Switzerland as well as in the UK.

Martin Wheatley, chief executive of the Financial Conduct Authority, had said last month: “Firms must make sure their traders do not game the system to boost profits or leave the ethics of their conduct to compliance to worry about.

 “At the end of the day companies might have lax controls that allow bad things to happen but it’s people that do bad things.”