Citigroup & JPMorgan: Wrapped Up in Another International Investigation
You know what they say: another day, another allegation of institutional corruption at the world’s largest financial institutions. People with knowledge of the matter tell Bloomberg Businessweek that Citigroup (NYSE:C), JPMorgan (NYSE:JPM), and Standard Chartered have placed top currency dealers on leave after regulators began probing the banks over possible manipulation of foreign exchange rates.
Bloomberg’s sources report that Citigroup head of European spot trading Rohan Ramchandani and JPMorgan chief dealer Richard Usher were put on leave by mutual agreement this week and last, as regulators examine the issue. Regulators are reportedly focusing on an instant messaging service used by the two men and dealers at at least three other major banks: Barclays (NYSE:BCS), Royal Bank of Scotland Group (NYSE:RBS), and UBS AG (NYSE:UBS).
Between them, the five firms account for about 47 percent of the $5.3 trillion daily foreign exchange market, and regulators from England and Switzerland are investigating whether the dealers used the communication network to manipulate the day-end exchange rates that are at the core of the market. If the dealers colluded with one another to push rates in a favorable direction, regulatory action could be taken against the individuals and/or the banks at which they work.