UK Serious Fraud Office to launch forex market manipulation probe 

The UK’s Serious Fraud Office (SFO) is reportedly planning to launch the criminal investigation into alleged manipulation of the $5.3trn-a-day foreign-exchange (forex) market.

Unnamed sources with the knowledge of matter were quoted by The Financial Times as saying that SFO was collecting intelligence over possible forex rigging during the past few months, and is likely to announce a formal investigation before the month end.

Any SFO announcement follows increasingly frequent information-sharing meetings with the Financial Conduct Authority (FCA), the sources added.

FCA is among several global regulators that have ordered the banks to undertake internal investigations into whether currency traders manipulated forex markets to enhance their own positions.

Targeting target both banks and who risk imprisonment, the probes are likely to lead to penalties for the banks equal to those already levied over the London Interbank Offered Rate (LIBOR) scandal.

The banks and interdealer brokers have to date paid more than $6.5bn to settle Libor scandal.

Without confirming or denying the report, the SFO said: “We are receiving and examining complex data on this topic. If and when we open a criminal investigation, that decision will be announced in the usual way.”

Approximately three dozen traders from ten banks have been sacked or placed on leave to date, while the Bank of England suspended one official, according to the news agency.

However, the legal experts believe that the SFO investigation could protect some traders from potential extradition to the US if they were charged by the US Department of Justice (DoJ), whose antitrust and fraud teams have already initiated a criminal probe into the matter.

The SFO reportedly needs additional resources and so-called blockbuster funding from the UK Treasury to undertake another investigation, having dedicated 50 staff to Libor investigations.

Source: Banking Business Review

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