Currency Probe Widens as Major Banks Suspend Traders – More Than a Dozen Traders Affected as Investigators Pore Over Chat-Room Transcripts
A number of traders are either suspended or put on leave for the suspected wrongdoing in the foreign currency trading market. The scope of such an inappropriate behavior in the currency trading business is worldwide, because in the latest market-manipulation investigation, a number of high-profile currency traders are under scrutiny in New York, London and Tokyo. The focus of the investigation is in part on electronic chat rooms, where a number of currency traders communicate with one another in terms of market-sensitive information, as well as jokes about their ability to influence exchange rates. According to people adequate about the probe, none of the reasons could possibly justify those inappropriate and unethical actions by those accused currency traders. As a matter of fact, the exposure of the foreign-exchange probe demonstrated that how lightly regulated financial markets are susceptible to potential manipulation. The alteration with Libor has resulted $3.5 billion in penalties, and yet the intention to alter foreign exchange rates continues. Interestingly, there are a variety of references that coming from the electronic chat rooms, such as drug use and sexual acts. However, the central issue in the probe is the currency “fixes” – the daily snapshots of trading used by money managers and others for valuations on financial assets. If it is proven that there are ties between traders at different banks and the possibility they worked with one another in an effort to cause the exchange rates to fluctuate as their wishes, those traders will certainly have to answer to their own actions. As much as many banks are cooperating with regulatory agencies, the resulted suspensions across top-flight market-making banks could start to hamper the way the business functions. Nonetheless, wrongdoing is what it is according to the regulation.