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Screenshot of a breaking news alert e-mail from Q2 2017
New York State Financial Services Superintendent Benjamin Lawsky has issued subpoenas to three major European banks and one North American bank as part of a probe into the manipulation of FX rates.
Credit Suisse, Societe Generale, Goldman Sachs and BNP Paribas were served subpoenas in December 2014, the month after US, British and Swiss national regulatory authorities concluded their year-long investigation into the rigging of FX rates by six major banks which resulted in a collective $4.3 billion fine.
That particular conclusion clearly did not put paid to the regulatory commitment to rooting out the practice, with Mr. Lawsky now leading the charge.
A subpoena is a legal document issued by a government agency, most often a court, to compel testimony by a witness or production of evidence under a penalty for failure, and applies in most cases to United States federal law.
Mr. Lawsky, a senior attorney, has a very clear understanding of financial technology and its application in the modern marketplace, an aspect demonstrated by his instigation of the BitLicense virtual currency regulatory framework last year, in order that New York based Bitcoin businesses could establish and grow with a view to encouraging the development of the technology which operates the virtual currency ecosystem.
This case which Mr. Lawsky is bringing against the four large banks also puts technology under the microscope, as the subpoena asks the banks for documents related to their currency operations, with a particular interest by Mr. Lawsky in finding out the specific technologies the banks used.
Indeed, it had been previously reported that Mr. Lawsky had begun to investigate the algorithms used by FX trading desks within Deutsche Bank and Barclays in mid December, a matter that is ongoing.
According to various mainstream media sources, the four banks are cooperating with Mr. Lawsky.