Home > companies > HSBC, Citi suspend traders as forex probe deepens

London: HSBC and Citigroup both suspended foreign exchange traders on Friday as a global probe into possible currency market manipulation intensified.

Regulators from the US arrived in London this week, stepping up an investigation in which they are working with Britain’s financial watchdog to determine whether traders at some of the world’s biggest banks colluded to manipulate the $5.3 trillion-a-day foreign exchange market.

The investigations centre on senior traders’ communication of client positions via electronic chatrooms, which featured prominently also in a probe into the rigging of a key interest rate known as the London interbank offered rate, or Libor.

As the currency investigation ramps up, the banks themselves are scrutinising their employees more closely and most are now carrying out internal investigations.

Sources told Reuters that Deutsche Bank suspended several traders in New York this week, while the US regulators descended on Citigroup’s London offices.

A spokesman for HSBC confirmed the bank had suspended two FX traders in London, but declined further comment.

The two HSBC traders suspended are Serge Sarramegna and Edward Pinto, said a person with direct knowledge of the situation. The two men could not immediately be reached by phone or email.

Their positions were not known, although Sarramegna has in the past been head of the G10 spot FX desk. Both are listed as active on the UK regulator’s register of financial services staff.

A Citigroup spokesman said two FX traders had been sent “on leave". One trader works in London, and the other works in New York, two people with knowledge of the matter said.

Several traders at several banks have been suspended or sent on leave. Citi last week fired its head of European spot foreign exchange trading, Rohan Ramchandani, following a prolonged period on leave, one source with knowledge of the matter said.

Deutsche Bank, Citi and HSBC are three of the biggest players in the FX market.

Britain’s Financial Conduct Authority began a formal investigation into the currency market in October and the US justice department is also investigating possible manipulation.

The FCA is focusing on around 15 banks, whom it has asked for—or required to provide—information about currency trading activities. Reuters

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