Major Banks Suspend Traders for Forex Trading Collusion

They allegedly used online chat rooms to communicate

wrapup-trading-floorAbout a dozen traders from leading international banks have been suspended over allegations that they improperly shared client data and timed trades in a bid to boost profits in foreign currency exchange (Forex) trading.

Sources tell the Wall Street Journal that Citigroup (C), Barclays (BCS), UBS (UBS) and JPMorgan Chase (JPM) have suspended some London-based employees involved in Forex trading. Among the suspensions were three Forex traders who served on a Bank of England committee that monitors London-based Forex trading markets.

SEC Investigating More Banks in Hiring Probe
SEC Investigating More Banks in Hiring Probe

British regulators launched the Forex trading probe back in April. Investigators have since uncovered messages sent between Forex traders in online chat-rooms that suggests they were exchanging client data and scheduling Forex trading transactions in a way that optimized their results by manipulating currency prices. Participants in the chat room discussions revealed upcoming customer Forex trading data and then came to agreements about the timing of Forex trading transactions. The collusion had the effect of mitigating losses and boosting Forex trading profits

American, Swiss, German and Hong Kong regulators are now participating in the Forex trading probe.

In Friday morning trading, C stock and JPM stock slipped slightly, while BCS stock and UBS stock moved modestly higher.

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