Citigroup and HSBC on Guard as Regulators Probe Forex Units
Amid an investigation into the dubious practices of foreign exchange traders at Citigroup (NYSE:C) and HSBC (NYSE:HSBC), both banks have suspended and/or fired numerous employees. The latest round of internal actions involves multiple suspensions as U.S. and U.K. regulators widen their focus to include scores of Forex traders at the world’s biggest banks, The Wall Street Journal reports.
According to multiple sources, Citigroup confirmed on January 17 that it had suspended two currency traders working in New York and London locations a week after the bank’s firing of its head of Forex trading in London. Citi’s internal investigations prompted the move following a sweep by regulators through the bank’s London offices.
HSBC also confirmed it had suspended two traders, of which one fronts the bank’s currency trading operation, following the revelation they may have been involved in market manipulation. Chatrooms populated by currency traders for the banks in question bore names such “The Cartel” and “The Mafia.” Regulators in the U.S. and England are looking deeper into the group’s activities to determine whether evidence of currency manipulation and price fixing exists.