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Barclays suspends six traders as forex probe goes global

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(Globalpost/GlobalPost)

Barclays has suspended six traders while it investigates the possible manipulation of foreign exchange markets, a source said on Friday.

The British state-rescued Royal Bank of Scotland (RBS) also suspended two of its traders on Thursday as part of the international probe, another source said.

And, in a further development, American banks Citigroup and JPMorgan Chase said they have been approached by US and foreign authorities as part of the foreign exchange investigations.

Barclays declined to comment, but a source close to the matter confirmed that six employees had been suspended.

Some of the six were reportedly based outside Britain.

Deutsche Bank and Swiss bank UBS are also caught up in the forex probe.

RBS, which was bailed out by the taxpayer following the 2008 financial crisis, said in a statement with its third quarter results on Friday that it had been contacted by Britain's Financial Conduct Authority (FCA) and other authorities over the probe.

It added: "The group is reviewing communications and procedures relating to certain currency exchange benchmark rates as well as foreign exchange trading activity and is cooperating with these investigations.

"At this stage, the group cannot estimate reliably what effect, if any, the outcome of the investigation may have on the group."

RBS chief executive Ross McEwan refused to comment on the case, but said the bank will "come down very severely on anyone we discover has been breaking the rules".

In the US, Citigroup and JPMorgan Chase, in filings to the Securities and Exchange Commission, confirmed having received queries on the same issue.

"Government agencies in the US and other jurisdictions are conducting investigations or making inquiries regarding trading on the foreign exchange markets," Citi said.

"Citigroup has received requests for information and is cooperating with the investigations and inquiries and responding to the requests."

JPMorgan said it had received information requests from "various government authorities" regarding its foreign exchange trading business.

"These investigations are in the early stages and the firm is cooperating with the relevant authorities," it said.

The banking sector has already been shaken by a rigging scandal related to the Libor, a benchmark rate for lending between banks that also determines numerous financial and interest rate contracts around the world.

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http://www.globalpost.com/dispatch/news/afp/131101/barclays-suspends-six-traders-forex-probe-goes-global