Hong Kong financial regulator now involved in 4pm fix manipulation investigation

…and the UK’s FCA is looking at IMs and chatroom activity of JP Morgan’s Chief FX Dealer in London.

As we have recently reported, several financial regulators across the globe, later joined by the FBI, have started regulatory and criminal probes into currency rates manipulation around the daily 4pm London fix of FX rates. Reports by Bloomberg and the WSJ are linking current JP Morgan (NYSE:JPM) London chief FX dealer Richard Usher to the investigation, although it dates back to work he did when previously at the Royal Bank of Scotland (NYSE:RBS) back in 2010.

The FCA’s investigation is apparently looking at instant messages written by Usher as well as participation in trader chat rooms with rather bizarre monikers – “The Bandits’ Club” and “The Cartel” – in which Usher apparently included details of his trading positions. Usher was a member of the Bank of England’s 27-member Foreign Exchange Joint Standing Committee chief dealers’ subgroup, as recently as December of last year.

It should be noted that at this stage the regulator’s review doesn’t imply wrongdoing on Usher’s part.

The UK’s FCA issued a somewhat terse and odd press statement yesterday on the subject, reading:

We can confirm that we are conducting investigations alongside a number of other agencies both in the UK and abroad into a number of firms relating to trading on the foreign exchange (forex) market.

As part of this we are gathering information from a wide range of sources including market participants. Our investigations are at an early stage and it will be some time before we conclude whether there has been any misconduct which will lead to enforcement action.

We will not comment further on our investigations.

Joining the overall investigation is also the Hong Kong Monetary Authority, Hong Kong’s de facto central bank. Reuters reports that the Hong Kong Monetary Authority is conducting talks with banks in the region and abroad about the alleged FX rates manipulation, becoming the first Asian authority confirmed to also be involved in the investigations.

For more on the global Forex industry see the LeapRate-Dow Jones Forex Industry Report.

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Hong Kong financial regulator now involved in 4pm fix manipulation investigation


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