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Screenshot of a breaking news alert e-mail from Q2 2017
European and North American regulatory authorities continue their investigations into possible manipulation of FX market parameters by banks, with France’s largest bank, BNP Paribas having today suspended its Head of FX Trading
Last year was a year of mixed virtues. Within the FX industry, great progress was made in terms of corporate performance when compared with 2012, and many retail FX firms reported record volumes across the board.
For trading desks within some of Europe’s largest banks, however, a different dynamic entirely emerged, as a series of large financial institutions came under regulatory scrutiny for the alleged manipulation of FX market parameters.
The latest casualty came to light today, as BNP Paribas suspended its Head of Spot FX trading, London-based Bob de Groot as part of the large scale investigation into possible market abuse by regulatory authorities in several jurisdictions worldwide.
Indeed, Britain’s Financial Conduct Authority (FCA), and the U.S. Department of Justice which began investigation into the possible abuse of FX market parameters by banks in the third quarter of last year are conducting their research into establishing a means of rectifying the alleged practice.
Mr. de Groot, according to an announcement today by Reuters, did not respond to emailed requests for comment and calls to his office were directed to BNP Paribas’ communications department.
A series of traders have been placed on leave, had their employment terminated or have been suspended from their roles since October 2013, including chief dealers within FX trading departments at large multinational financial institutions including Citigroup, J.P. Morgan Chase, Barclays and UBS.
Reuters further concurred that the Bank of England had suspended a staff member on Wednesday this week as part of an internal investigation into what it knew about the alleged manipulation of reference exchange rates, with full detail having been reported by LeapRate earlier today.
The Bank of England publicly stated that it had found no evidence that its staff colluded in any manipulation or shared confidential client information, adding that it had made the suspension pending a probe into compliance with its own internal control processes.
Despite the large scale and somewhat exhaustive investigation into potential manipulation among western institutional FX trading desks, it is evident that European and American authorities will continue to consign resources to this matter, with the recent series of high profile executives having been placed under scrutiny.
In the Asia Pacific region, however, a total of 133 institutional traders in the Far East’s largest center for corporate FX were disciplined during 2013 following a year-long surveillance conducted by the Monetary Authority of Singapore on the manipulation of FX benchmarks within its jurisdiction.