Bloomberg is reporting that according to a source, JPMorgan Chase & Co. (JPM) has suspended currency dealer Gordon Andrew for alleged wrongdoing involving his work at Royal Bank of Scotland Group Plc. (RBS). According to The Wall Street Journal, people familiar with the matter say that the firm discovered evidence that Andrew disclosed trading data to employees of other banks. The forex trader does a lot of work converting huge amounts of euros into pounds at benchmark rates related to subsidies that the EU pays to British farmers every year.
Andrew began working for JPMorgan in October 2012 after Richard Usher, an RBS colleague, also switched to the firm. Usher was JPMorgan’s chief currency dealer in London until 2013 when he was put on leave during a global probe into foreign exchange market manipulation. He left the firm the following year. Regulators in the U.K. and the U.S. have since fined JPMorgan $1 billion related to the rigging probe. RBS was ordered to pay a $634 million fine.
Today, the WSJ reported that the probes into currency market manipulation have led to new signs of possible wrongdoing. Sources tell the newspaper that JPMorgan has even put aside another $900 million to cover investigation-related costs as well as legal bills. Meantime, broker-dealer Tullett Prebon PLC (TLPR) has started an internal review into its currency market practices. One of its brokers was allegedly referred to as a trade conduit in one chat room. That broker still works for the firm. In 2014, British fraud prosecutors charged an ex-Tullet broker with assisting other bank traders in manipulating trades.
Citigroup (C) has also suspended or let go of a number of sales members and foreign-exchange traders in the wake of the probe. UBS (UBS) is also under investigation, as is HSBC (HSBC).
The U.S. Justice Department is trying to determine whether the latter’s sales team sent out market-moving data to Moore Capital Management LLC, which is a hedge fund, about an upcoming trade related to a big corporate acquisition. The government has been looking at whether hedge fund clients were tipped by bank employees about big foreign-exchange trades that the firms were planning, as well as “spoofing,” which involves brokers and traders turning in bogus trading information to shift the market or cause confusion.
The probes by the US and British governments are looking into possible improprieties in the forex-market. Already, banks have admitted to having employees that tried to manipulate certain areas of the currency market, with six banks settling the allegations for $4.3 billion. Aside from JPMorgan and RBS, firms that have also settled include UBS, HSBC, Citigroup, and Bank of America (BAC).
If you believe that your investment losses are because of securities fraud, contact The SSEK Partners Group today.
JPMorgan Currency Trader Said to Be Suspended for Actions at RBS, Bloomberg, January 14, 2014
Forex Probe Finds New Signs of Potential Wrongdoing, The Wall Street Journal, January 14, 2015
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