Forex Market Investigation: Collusion in the Chat Rooms?

It’s 3:40 in the afternoon in London, and computers blink red and green as traders buy and sell billions of dollars of currency. The pace picks up with the approach of the “fix”—the one-minute period beginning 30 seconds before 4 p.m. Trades made during the fix help determine the WM/Reuters currency exchange rates used as benchmarks by multinational corporations, money managers, and investors around the world to value contracts and assets.

As they check prices and complete deals, some traders participate in as many as 50 online chat rooms. Messages from salespeople and clients appear on their monitors, get pushed up by new ones, and vanish from view. Now regulators from Bern, Switzerland, to Washington are examining evidence that a small group of senior traders at big banks had something else on their screens: details of each other’s client orders. Sharing that information may have helped dealers at JPMorgan Chase, Citigroup, UBS, Barclays, and others manipulate prices to maximize their profits, say five people with knowledge of the probes who asked not to be identified because the matter is pending.