FX investigation not limited to banks, as BP looks at its forex traders


The aftermath of the global regulatory investigation into six banks with regard to manipulation of FX benchmarks which was closed in November this year with a $4.3 billion fine being issued collectively by Swiss, British and North American regulators is still in full swing, as investigations by companies and law enforcement agencies begin to gain momentum.

Today, it has been reported that British multinational oil giant BP plc (ADR) (NYSE:BP) (formerly British Petroleum) has investigated whether traders on its FX desk were involved in the widespread manipulation of benchmarks.

According to a report today by the Daily Telegraph, the company has conducted a review of its trading operations, most of which is based in London, as a result of the company’s treasury trading unit having been made aware of planned currency trades some hours before the trades took place.

Among the concrete evidence which regulatory officials used to prove that traders within major banks had been instrumental in manipulating FX benchmark rates was a series of chat room and instant messenger conversations between traders, in which many elaborated on their activities.

In this case, the instant messenger has been a further source of evidence, as Bloomberg claimed it had seen copies of messages sent to BP staff by a group of senior FX traders at JP Morgan, Barclays, UBS and Citigroup, who met in a chatroom named “The Cartel”.

Bloomberg alleged that a BP trader had used a chatroom with a JP Morgan trader, however, the Daily Telegraph asserts that there is no evidence that any BP traders were members of The Cartel nor that anyone at BP acted on information allegedly passed to them.

In a statement which was published today by the Daily Telegraph, BP said: “Following regulatory market (not into BP) investigations regarding the forex markets, we conducted a review into our activities in this area. BP’s forex desk has relationships (as a customer) with 26 relationship banks, including JP Morgan, Citibank and Barclays.”

“BP has a robust framework of compliance requirements and internal controls which are constantly reviewed, and maintains an open dialogue with the appropriate regulators.”

A source told the Daily Telegraph that BP did not find any wrongdoing and closed its investigation.

BP declined to comment on individual staff members, but said that its “code of conduct includes mandatory requirements for employees to disclose potential conflicts of interests internally”.

Dozens of bankers have been suspended or fired in relation to forex manipulation, and Chancellor George Osborne wrote to the Serious Fraud Office saying it would be provided with as many resources as necessary to investigate wrongdoing, as the criminal convictions are now a British government priority, with one trader having been the subject of arrest in Billericay, Essex recently.

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FX investigation not limited to banks, as BP looks at its forex traders

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