SFO launches FOREX price rigging probe
The Serious Fraud Office (SFO) in the UK has launched a criminal investigation into allegations of price rigging in the £3 trillion-a-day foreign exchange market.
The inquiry will look into allegations of "fraudulent conduct", the director of the SFO said in a statement. It is alleged that traders used online chatrooms to plan the fixing of benchmark prices.
Around 15 international agencies are currently investigating allegations of collusion and price manipulation.The Financial Conduct Authority (FCA) said last October it had joined other regulators around the world in scrutinising firms over the potential manipulation of the foreign exchange market.
Several investment banks, including Barclays and HSBC have already suspended currency traders due to the investigation by the FCA.
Warwick Business School Dean Mark Taylor, a former foreign exchange trader and senior economist at the Bank of England, says the move goes beyond safeguarding the integrity and reputation of financial markets and the City of London.
“The manipulation of the London 4pm Fix doesn’t just affect banks and traders, but the man in the street as well, as it is our pension and insurance funds that could be swindled out of millions of pounds by this,” he commented.
“These allegations have yet to be proved, but if the Serious Fraud Office does find them to be true, it will strike at the heart of business ethics. It would be yet another blow to the integrity of the banks. Our pension funds invest billions of pounds in the financial markets and if they are being cheated in this way it affects every one of us.”