The forex scandal (also known as the forex probe) is a financial scandal that involves the revelation, and subsequent investigation, that banks colluded for at least a decade to manipulate exchange rates for their own financial gain. Market regulators in Asia, Switzerland, the United Kingdom, and the United States began to investigate the $5.3 trillion-a-day foreign exchange market (forex) after Bloomberg News reported in June 2013 that currency dealers said they had been front-runningclient orders and rigging the foreign exchange benchmark WM/Reuters rates by colluding with counterparts and pushing through trades before and during the 60-second windows when the benchmark rates are set. The behavior occurred daily in the spot foreign-exchange market and went on for at least a decade according to currency traders.[3]
At the center of the investigation are the transcripts of electronic chatrooms in which senior currency traders discussed with their competitors at other banks the types and volume of the trades they planned to place. The electronic chatrooms had names such as "The Cartel", "The Bandits’ Club", "One Team, One Dream" and "The Mafia".[4][5][6] The discussions in the chatrooms were interspersed with jokes about manipulating the forex market and repeated references to alcohol, drugs, and women.[7] Regulators are particularly focusing in on one small exclusive chatroom which was variously called The Cartel or The Mafia. The chatroom was used by some of the most influential traders in London and membership in the chatroom was highly sought after. Among The Cartel's members were Richard Usher, a former Royal Bank of Scotland (RBS) senior trader who went to JPMorgan as head of spot foreign exchange trading in 2010, Rohan Ramchandani, Citigroup’s head of European spot trading, Matt Gardiner, who joined Standard Chartered after working at UBS and Barclays, and Chris Ashton, head of voice spot trading at Barclays. Two of these senior traders, Richard Usher and Rohan Ramchandani, are members of the 13-member Bank of England Joint Standing Committee's chief dealers group.[8]
On 19 December 2014 the first and only known arrest was made in relation to the scandal. The arrest of a former RBS trader took place in Billericay, Essex, and was conducted by the City of London Police and the Serious Fraud Office.[30]
At the center of the investigation are the transcripts of electronic chatrooms in which senior currency traders discussed with their competitors at other banks the types and volume of the trades they planned to place. The electronic chatrooms had names such as "The Cartel", "The Bandits’ Club", "One Team, One Dream" and "The Mafia".[4][5][6] The discussions in the chatrooms were interspersed with jokes about manipulating the forex market and repeated references to alcohol, drugs, and women.[7] Regulators are particularly focusing in on one small exclusive chatroom which was variously called The Cartel or The Mafia. The chatroom was used by some of the most influential traders in London and membership in the chatroom was highly sought after. Among The Cartel's members were Richard Usher, a former Royal Bank of Scotland (RBS) senior trader who went to JPMorgan as head of spot foreign exchange trading in 2010, Rohan Ramchandani, Citigroup’s head of European spot trading, Matt Gardiner, who joined Standard Chartered after working at UBS and Barclays, and Chris Ashton, head of voice spot trading at Barclays. Two of these senior traders, Richard Usher and Rohan Ramchandani, are members of the 13-member Bank of England Joint Standing Committee's chief dealers group.[8]
On 19 December 2014 the first and only known arrest was made in relation to the scandal. The arrest of a former RBS trader took place in Billericay, Essex, and was conducted by the City of London Police and the Serious Fraud Office.[30]
