American investigators have turned multiple bank employees into secret informants in relation to the international probe of alleged FX rates manipulation, and are preparing to seek criminal charges against individual traders as early as next month, the Wall Street Journal reported on Sunday, citing people familiar with the matter.
U.S Justice Department prosecutors and Federal Bureau of Investigation agents have “flipped” a number of bank employees who have remained at their jobs, secretly gathering evidence against their colleagues by engaging in exchanges with suspects about possible crimes and recording them, the WSJ was told.
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The ongoing investigations of FX rates manipulation around the world initially focused on chat groups in which institutional dealers sent instant messages over their Bloomberg terminals. For a period of three years, in chat groups with names such as ”The Cartel” and “The Bandits’ Club,” bank traders allegedly shared information with competitors, allowing them to execute their own trades before filling client orders. Bankers in a number of countries have already been suspended or fired as the investigations extend to more jurisdictions over time.
It was not made clear in which banks the government had “moles” working for the investigation. However, a couple of months ago, in response to a U.S class action lawsuit request, these banks were revealed as possibly being involved: Bank of America, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC Holdings, JPMorgan Chase, Morgan Stanley, Royal Bank of Scotland and UBS. These dozen banks control 84% of the global market and act as counterparties in 98% of U.S. spot volume.