According to sources close to the WSJ, London-based chief of foreign exchange spot trading of State Street Global Markets, Simon Pepper, has not been spotted at his trading desk for a couple of weeks.
The bank has so far remained relatively insulated from the ongoing FX fixing investigations and this marks the first potential irregularity related to the ongoing forex rates fixing investigations around the globe.
Internal controls at financial institutions have been tightened drastically in light of the recent spat of firings, allegations and investigations. The bank forex trading desks have been slimmed down, prompting for some reports of low FX volatility being a result of the investigation.
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However, there is little evidence of that being a decisive factor in market activity. The only lasting result is that global financial institutions have accelerated the implementation of electronic trading platforms to provide a fully transparent way of dealing with their customers.
With the banking industry’s reputation already tarnished by the LIBOR and mortgages related probes, the companies are rushing to “fix” the fixing problem before they lose a huge chunk of this traditionally strong market for themselves. Even some of the most reputable financial institutions, such as the Singapore’s Monetary Authority, have been drawn into the scandal.
Recent reports of American investigators having turned multiple bank employees into secret informants in connection with the international probe of alleged FX rates manipulation, have sparked speculation that the U.S Department Of Justice (DOJ) will seek to file criminal charges against individual traders as early as next month.
Forex Magnates has reached out to the bank which had this to say: “One member of our foreign exchange trading staff in the United Kingdom is currently out of the office. As I’m sure you can appreciate, we cannot comment on any additional details at this time. All discussions involving employees are confidential. We have more than 120 sales and market risk traders engaged in foreign exchange trading globally and, consequently, one employee’s absence in no way impacts our ability to manage the foreign exchange requirements of our clients.”