Forex trading scandal

from Wikipedia, the free encyclopedia

The currency trading scandal is the term used to describe allegations of fraudulent manipulation of foreign exchange rates , which in 2013 led to global investigations by financial market supervisory authorities and internal investigations by numerous large banks.

background

Approximately five trillion US dollars are traded on the foreign exchange market worldwide every day . This trading takes place on a large scale in the form of derivatives . Compared to other markets, trading is less regulated. Currency rates are calculated and evaluated , for example, by the WM / Reuters agency , which has been part of the Thomson Reuters group since 2008 . In this context, forecasts are also made about the possible development of the courses.

accusations

Foreign exchange dealers from twelve major banks were accused of having manipulated the rates at certain times through agreed currency transactions in such a way that the derivatives they held ("rate bets") yielded profits. For this purpose, for example, they placed existing large orders from customers in the market at a specific time or obtained advantages through front running . These manipulations theoretically damaged not only the customers of the traders and the issuers of the derivatives, but also every other market participant who trades in currencies.

In June 2013, the Bloomberg news channel reported on the manipulation practices, citing statements from five foreign exchange dealers who wanted to remain anonymous. Accordingly, it has been daily practice for more than ten years that traders manipulate the rates of the most important currency pairs through collusion. Large customers are already aware of this problem and therefore often withhold large currency orders until shortly before 4 p.m. in order to give traders as little time as possible to use their knowledge for their own manipulations.

Investigations

The British Financial Conduct Authority (FCA ) then opened an investigation. In the summer of 2013, the German BaFin was brought in , and later also the Swiss Finma . The big banks also started their own investigations and began to evaluate mails and chat logs from their dealers in order to find indications of collusion.

consequences

In some cases, the traders accused themselves of the practices or bragged about them in the chats. In London, some traders were given leave of absence from the banks, and there were also layoffs. In Switzerland, the Federal Prosecutor's Office opened criminal investigations against individuals. As a consequence, Deutsche Bank banned its foreign exchange dealers from using internal chats.

British and US authorities imposed fines totaling US $ 4.3 billion through Bank of America , Citigroup , HSBC , JPMorgan Chase , Royal Bank of Scotland and UBS in November 2014 .

See also

Web links

Individual evidence

  1. ↑ JPMorgan to pay $ 99.5 million to resolve currency rigging lawsuit reuters.com
  2. ↑ http://thomsonreuters.com/en/products-services/financial/foreign-exchange-markets.html
  3. ↑ Spiegel Online : Banks under suspicion: BaFin is investigating for manipulating exchange rates. December 4, 2013, accessed December 5, 2013 .
  4. ^ A b Spiegel Online : Allegations of manipulation: British financial regulator investigates foreign exchange transactions. June 13, 2013, accessed December 5, 2013 .
  5. ↑ Bloomberg : Traders Said to Rig Currency Rates to Profit Off Clients. June 12, 2013, accessed December 5, 2013 .
  6. ↑ Spiegel Online : Investigations in Switzerland: Banks are said to have manipulated exchange rates. October 4, 2013, accessed December 5, 2013 .
  7. ↑ How the forex trading scandal came to light telegraph.co.uk, accessed on February 1, 2015
  8. ↑ Criminal investigations into the foreign exchange scandal against bankers nzz.ch
  9. ↑ sueddeutsche.de : Serious suspicion against large banks. December 4, 2013, accessed December 5, 2013 .
  10. ↑ Banks fire more dealers handelsblatt.com