The forex scandal also known as the forex probe is a financial scandal that involves the revelation, and subsequent investigation, that banks colluded for at least a decade to manipulate exchange rates for their own financial gain. The behavior occurred daily in the spot foreign-exchange market and went on for at least a decade according to currency traders.
At the center of the investigation are the transcripts of electronic chatrooms in which senior currency traders discussed with their competitors at other banks the types and volume of the trades they planned to place. The chatroom was used by some of the most influential traders in London and membership in the chatroom was highly sought after. The manipulations' overall estimated cost is not yet fully known.
The FCA determined that between 1 January and 15 October the five banks failed to manage risks around client confidentiality , conflict of interest , and trading conduct. The banks used confidential customer order information to collude with other banks to manipulate the G10 foreign exchange currency rates and profit illegally at the expense of their customers and the market. The CFTC specifically fined: The CFTC found that currency traders at the five banks coordinated their trading with traders at other banks in order to manipulate the foreign exchange benchmark rates, including the 4 p.
Currency traders at the banks used private chatrooms to communicate and plan their attempts to manipulate the foreign exchange benchmark rates.
In these chatrooms, traders at the banks disclosed confidential customer order information and trading positions, changed trading positions to accommodate the interests of the collective group, and agreed on trading strategies as part of an effort by the group to manipulate different foreign exchange benchmark rates.
These chatrooms were often exclusive and invitation only. On 19 December the first and only known arrest was made in relation to the scandal. Respective authorities have announced remediation programmes aimed at repairing trust in their banking systems and the wider foreign exchange market place.
In the United Kingdom the FCA has stated that the changes to be made at each firm will depend on a number of factors, including the size of the firm, its market share, impact, remedial work already undertaken, and the role the firm plays in the market. From Wikipedia, the free encyclopedia. Don't want other numpty's in mkt to know [about information exchanged within the group], but not only that is he gonna protect us like we protect each other Retrieved 13 November Retrieved 21 January Retrieved 3 February Retrieved 1 July Retrieved 18 February Retrieved 28 July The Bureau of Investigative Journalism.
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