Retail forex traders you are not alone – if you thought that only the small fish get marked-up spreads or not the best rate available you were wrong. WSJ reports that some of America’s largest investment firms suspect they didn’t receive the prevailing rates on the market and if you calculate the size of these firms the mark-ups and rates differences get to huge sums.
This is not the first time this is happening – back in 2009 the California attorney general’s office has charged the State Street Corporation (company that owns Currenex) with fraud, accusing the company of cheating the state’s two largest pension funds of at least $56.6 million by overcharging them for a series of foreign exchange trades.
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So is everybody cheating clients in this market – small and big? Apparently the answer is yes.
Some of the nation’s largest investment firms have been overcharged by banks for currency trades, bank insiders and others claim, broadening the scope of alleged abuses in pockets of the $4 trillion foreign-exchange market.
BlackRock Inc., the world’s largest fund manager, became concerned at the rates it and its clients were charged for some currency trades by custody banks including Bank of New York Mellon Corp. according to an internal BlackRock investigation about a year ago and people familiar with the firm. BlackRock recently altered the way it trades currencies, either doing the trading itself or demanding evidence from custody banks that it is receiving prevailing market rates, said people familiar with the firm.