London has long been revered as the world’s largest financial center and home to some of the most renowned financial institutions, however as recent events have indicated, such status does not necessarily provide immunity from malpractice.
As 2013 drew to a close, a great many British and European banks came under the scrutiny of the Financial Conduct Authority as well as European regulators for alleged manipulation of FX rates by institutional trading desks, resulting in some extremely punitive fiscal penalties. Yesterday, it emerged that Citi has responded to this by terminating the employment of one of its senior traders.
Rohan Ramchandani, who held a senior trading position at Citi in London has, according to Reuters, been put on what is colloquially known in Britian as ‘gardening leave’ in October this year, following the allegations leveled at a series of financial institutions. This means that Mr. Ramchandani was not required to report to work, instead being requested to refrain from his duties whilst still under the employment of the firm and receiving full salary.
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Mr. Ramchandani, according to an investigation by the regulators, has been suspected of utilizing internal instant messaging systems and chat rooms in order to get a view on overall order flows and to use this information to build up positions just ahead of and during the fix.
British financial news source the Financial Times reported in November this year that by buying and selling a currency before the fix, a trader can try to influence the final fix price to profit from the whole range of client orders he is handling that day.
Mr. Ramchandani, a former member of the Bank of England Joint Standing Committee’s chief dealers group, according to the Reuters report, will not return to his position as Head of Spot FX at Citi, as the company has taken the decision to end his ‘gardening leave’ and terminate his employment entirely.
Whether this will send a signal to other firms operating in London, or whether Citi stands alone in having taken this draconian action is no doubt a matter of interest to the UK financial center’s heads of industry as these proceedings progress.