It has been some time since US government officials flew to Britain in order to interview FX traders in London with regard to the possible manipulation of FX rates within the trading desks of some of the world’s largest interbank FX dealers.
As the prolonged investigation has not yet provided any concrete results, despite the numerous suspensions of senior FX executives by a number of banks, prosecutors from the U.S. Department of Justice have begun offering impunity deals to junior traders in London in order to obtain information from them regarding the alleged actions of senior traders within the companies of their employ.
As the situation continues to cause an uneasy professional environment among many trading desks, the treatment of the allegations as a criminal investigation has brought with it the ability for US prosecutors to use procedures which are not often possible within civil law suits. Whether junior traders will be prepared to effectively tell tales on their superiors is hard to predict, however the US Department of Justice has granted a degree of assurances to informants that they will be protected as long as the information that they provide is truthful.
For many junior traders, being implicated in any FX rigging case may result in the scapegoating of such employees by large corporations, therefore with the offer of impunity to the less senior among employees, the US law enforcers have some degree of potential success in gaining useful information as the David and Goliath battle between banks and their employees may be mitigated should the international investigation conclude with the complaints against the banks being upheld, therefore causing employees to consider this a method of safeguarding themselves.
Currently, no information has been proffered under this agreement, but it is an interesting initiative by the US government as British investigations led by Lord Grabiner, including probes into the conduct of the Bank of England itself with regard to FX pricing, have reached the highest possible levels of authority without conclusion.