| International
[ 2014-03-11 ]
US investigators examine alleged forex rigging The US Securities and Exchange Commission has
joined a growing pack of the world’s financial
regulators by opening an investigation into the
alleged manipulation of foreign exchange markets.
The SEC is investigating whether forex traders’
actions had a knock-on effect on securities that
were linked to currency prices, Bloomberg News
reported yesterday.
Multinational companies use foreign exchange
derivatives to hedge against unexpected changes in
currency prices. About $15 trillion of foreign
exchange options contracts are in operation,
according to the latest figures from the Bank for
International Settlements, an umbrella group of
central banks.
The SEC declined to comment. The Financial Conduct
Authority declined to comment on whether it was
looking at securities as part of its forex-rigging
investigation.
Mark Carney, the Governor of the Bank of England,
will be questioned by MPs on the Treasury
Committee today over allegations that Threadneedle
Street was complicit in forex-rigging.
The scandal came to a head on Wednesday last week,
when the Bank revealed that it had suspended an
employee as part of an investigation into whether
its officials were involved in manipulating
currency markets. The Bank also began an internal
inquiry headed by a law firm, Travers Smith.
The Bank said that it had not found evidence that
staff were involved in rigging the markets. It has
declined to identify the suspended individual.
In the US, the Commodity Futures Trading
Commission, the Department of Justice, the New
York Department of Financial Services, the Office
of the Comptroller of the Currency and the Federal
Reserve are known to have opened investigations
into forex-rigging.
In Britain, the FCA and the Bank of England are
investigating the allegations. The Swiss financial
regulator, Finma, has opened an inquiry. Joaquin
Almunia, the EU competition commissioner, said
that the European Commission is examining the
allegations.
The $5.2 trillion-a-day forex market is some 20
times bigger than the size of the worldwide stock
market. More than 20 traders have been suspended
since allegations surfaced that the WM/Reuters
benchmark rate was being manipulated.
The fixed rate is based on currency trades made in
a one-minute window every day. Some of the trades
made in this window are believed to be suspect.
Source - The Times(UK)
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