U.S. DoJ expands FX market manipulation probe to Russian ruble and Brazilian real

Today Bloomberg reported that U.S. prosecutors expanded their probe of forex manipulation by some of the world’s largest banks to include the Russian ruble and Brazilian real trading, according to two people familiar with the matter. Trading of the Argentine peso has also attracted the attention of U.S. prosecutors, one of the people said who all remain anonymous.

The U.S. Department of Justice are examining a handful of institutions, including Deutsche Bank, the sources told Bloomberg. The bank has already been under hot water in the last couple of years involved around a half-dozen criminal and regulatory investigations, including for possible forex rate rigging.

The report went on to mention that traders at several banks in Moscow and other locations are being investigated for colluding to influence benchmark rates for emerging market currencies including the ruble to boost profit for their firms.

One of the key elements to the continuing chase for wrongdoing comes because prosecutors are allowed to rely on information provided by banks that resolved their  forex probes in May , according to the people. The following banks – Citigroup, Barclays, UBS, Royal Bank of Scotland Group and JPMorgan all have immunity from additional prosecution from the forex manipulation probe as long as they cooperate with investigators by reporting misconduct.

Spokesmen for the Justice Department, the CFTC and Deutsche Bank have declined comment on the expansion of the probe for now.

Antitrust regulators in other countries have opened investigations, too. In July, Brazil identified 15 banks and 30 traders under scrutiny. Among them are Deutsche Bank, Citigroup and Barclays, along with HSBC, Standard Chartered and Credit Suisse. The banks declined to comment. HSBC said it is cooperating with regulators and law enforcement in the U.S. and elsewhere. Credit Suisse didn’t respond to requests for comment.

Bloomberg referred to Russian chat room evidence that found that in one chat referenced in the CFTC case, a trader wrote, “we should all lower fix by several kopecks,” referring to a fraction of the ruble. A second trader responded “yes” while a third wrote that “it is a right idea to lower the fix by a few kopecks.” The Barclays trader responded “so what, 5 kopecks and all/everyone is splendid.”

For more concerning the latest forex market probe development emanating out of the U.S. click here.

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