New York regulator joins global forex investigation
A foreign exchange investigation into some of the largest U.S banks has been bolstered by the addition of New York’s Department of Financial Services (DFS).
The New York financial regulator recently caused Standard Chartered to pay $670 million in fines after it pursued the bank over breaching Iranian sanctions. The DFS is led by Ben Lawsky, a former federal prosecutor, and is the primary regulator in the state of New York.
Banks such as Goldman Sachs, Standard Chartered, Lloyds, Deutsche Bank, Credit Suisse, Barclays, Royal Bank of Scotland and Société Générale are being investigated with regard to the suspected manipulation of foreign exchange markets.
Formal requests for emails between traders and communication in chat rooms have been made. Citigroup and JP Morgan are not included on the list but both banks have stated that they are involved in foreign exchange enquiries with other regulators. Citigroup and Goldman Sachs are being persevered by at least six regulators worldwide.
European banks will have observed the DFS’s action against Standard Chartered in 2012 in which the bank’s reputation also came under attack from the regulator in addition to the considerable fine for breaking international sanctions on Iran.
The forex investigation has already led to traders being suspended from Standard Chartered, Royal Bank of Scotland, Barclays, Citigroup, Lloyds, UBS, and JP Morgan. Steven Cho, a Goldman partner and forex executive, and Anil Prasad, head of forex at Citigroup, have both resigned their posts, but these were apparently not related to the current forex inquiries.
