Just a month after the conclusion of the high profile global investigation into the conduct of six banks with regard to manipulation of FX benchmarks which resulted in $4.3 billion in fines, the law enforcement departments have now picked up the baton from the civil regulators.
It was clear at the time of conclusion, which resulted in Bank of America, Citigroup, HSBC, JPMorgan Chase, Royal Bank of Scotland and UBS having been issued the collective monetary penalty, that such a high profile matter would not be resolved once the banks had paid their respective fines.
On Friday this week, LeapRate reported that a former London-based FX trader had been arrested in Billericay, Essex by police officers for his alleged part in the manipulation of benchmark rates. As of today, the identity of the trader has not been made public information, however the British government has begun to show its proponency toward arresting and prosecuting individual traders and not just the institutions which employed them during the time at which these transgressions took place.
The Serious Fraud Office, which ordered the arrest of said trader in Billericay on Friday, is being urged by members of the treasury to arrest more indivuduals with a view to prosecuting them in a criminal court.
Today, the Daily Mail detailed that John Mann, a Labour party member of the Treasury Select Committee said: “I’d expect to see more arrests. Those involved should be held to account. However I would also expect those arrested to reveal the senior managers who turned a blind eye.”
Some are likely to be current or former employees of Barclays, according to the report. Whilst other British banks have already paid their civil penalty, the retail banking giant faces a fine of more than £500million for manipulating foreign exchange markets, following its refusal to settle with regulators in October.
The bank’s CEO Antony Jenkins last week admitted that the £500 million it had set aside to cover its bills would probably not be enough.
Whilst the police and law enforcement agencies begin to carry out the anticipated arrests, some of the City of London’s veterans have also begun to voice their opinion on the matter, with David Buik, a veteran financial commentator from broker Panmure Gordon, described the FX scandal as the “saddest episode in my 52 years working in the City.”
He said: “I’d be amazed if there were not many more arrests. The foreign exchange market is the biggest in the world so could make any wrongdoing related to LIBOR rates seem like a Vicarage tea party by comparison. Those found guilty of fraud should be sent to jail.”