Is forex market controlled by someone? - page 30
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fx market with daily turn over $5 billion, are controled by one person ? it means this guy should be a super rich above all.
i dont think any markets are controlled, it's a market place where seller and buyer gather and both side seeking moving into same direction, in search for profit.
Banks Said Poised to Settle With CFTC in FX-Rigging Cases
Banks suspected of rigging the $5.3 trillion-a-day currency market are preparing to reach settlements as early as this week with the main U.S. derivatives regulator, according to a person with knowledge of the cases.
The Commodity Futures Trading Commission may levy fines of about $300 million against each firm, depending on the level of their involvement, said the person, who spoke on condition of anonymity because deals haven’t been announced. It’s unclear how many firms may settle with the CFTC as U.K. and U.S. bank regulators prepare to levy related penalties this week, the person said.
There was no immediate response to an e-mailed request for comment from the CFTC after normal business hours. The New York Times reported late yesterday on the talks with the agency.
Investigations are under way on three continents as authorities probe allegations that dealers at the world’s biggest banks traded ahead of clients and colluded to rig benchmarks used by pension funds and money managers to determine what they pay for foreign currencies.
The U.K. Financial Conduct Authority is poised to reach settlements as soon as this week with six banks, which together have set aside about $5.3 billion in recent weeks for legal matters including the currency investigations, people with knowledge of those talks have said.
Barclays Plc, Citigroup Inc., HSBC Holdings Plc, JPMorgan Chase & Co., Royal Bank of Scotland Group Plc and UBS AG are in settlement talks with the FCA, people with knowledge of the situation have said.
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UK, U.S., Swiss close in on forex settlement with top banks
British and U.S. regulators are poised to levy hefty fines on leading banks in a landmark settlement after a year-long global investigation of allegations of collusion and manipulation in the foreign exchange market.
At least one of the six banks set to be named early on Wednesday by Britain's Financial Conduct Authority (FCA) was still in 11th-hour negotiations over details of the deal, two sources close to the matter said.
The banks - UBS, Barclays , Royal Bank of Scotland, Citigroup, JPMorgan and HSBC - will only sign off on an expected combined penalty of 1.5 billion pounds ($2.4 billion) late on Tuesday, sources said.
It would be the first settlement over allegations of misconduct in the $5.3 trillion-a-day foreign exchange market.
The Wall Street Journal reported on Tuesday that Swiss financial regulator FINMA had sent warning letters to around 10 past and present UBS employees about potential enforcement action for alleged misconduct in the forex market.
A spokesman for FINMA declined to comment. Britain's FCA also declined to comment.
U.S. regulators and FINMA are also expected to be among those close to concluding investigations. Any U.S. settlement is expected to name at least one other bank, a source told Reuters last week.
Bank of America has said it was in "advanced discussions" with U.S. bank regulators.
The U.S. Commodity Futures Trading Commission was likely to allege false reporting and manipulation, lawyers said, the two most applicable options under U.S. law, which it also used in its settlement over Libor benchmark rates.
This is in contrast to UK authorities, which can look at charges such as failure to put in place the right controls. The two U.S. banking regulators are likely to go after the banks for failing to prevent bad conduct.
The U.S. Office of the Comptroller of the Currency is likely to settle charges with Bank of America, Citi and JPMorgan.
The Federal Reserve will be responsible for any settlement with the units of the four foreign banks. But it was not clear whether the Fed would announce its deal at the same time.
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Banks to Pay $3.3 Billion in FX-Manipulation Probe
Regulators in the U.S., Britain and Switzerland ordered five banks to pay about $3.3 billion to settle a probe into the manipulation of benchmark foreign-exchange rates.
Switzerland’s UBS AG (UBSN) was ordered to pay the most at $800 million, according to statements from the U.S. Commodity Futures Trading Commission, Britain’s Financial Conduct Authority and Swiss Financial Market Supervisory Authority. Citigroup Inc. (C) was ordered to pay $668 million, followed by JPMorgan Chase & Co. (JPM) at $662 million, the filings show. Royal Bank of Scotland Group Plc paid $634 million and HSBC Holdings Plc (HSBA) paid $618 million.
“Countless individuals and companies around the world rely on these rates to settle financial contracts,” Aitan Goelman, the CFTC’s director of enforcement said in the statement. “The market only works if people have confidence that the process of setting these benchmarks is fair.”
The settlements are the first since authorities around the world began investigating allegations last year that dealers at the biggest banks colluded with counterparts at other firms to rig benchmarks used by fund managers to determine what they pay for foreign currency. The probes have expanded to include whether traders used confidential information to take bets on unauthorized personal accounts, and whether sales desks charged clients excessive commissions in the $5.3 trillion-a-day market.
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‘Lets Double Team It,’ FX Traders Say in ‘Cartell’ Chats
Traders worked together to “whack” the market, called themselves a “cartell” and congratulated each other for a job well done, according to transcripts released by regulators today.
“Ok, i got a lot of euros,” a currency trader at JPMorgan Chase & Co. (JPM) said in an undated 3:51 p.m. message to his counterpart at Citigroup Inc. (C) A minute later he says, “tell you what, lets double team it.”
Dozens of chats spanning four years from 2008 were released by regulators as they reached the first settlements in the global probe into the manipulation of foreign-exchange benchmarks. Citigroup, JPMorgan, Royal Bank of Scotland Group Plc, HSBC Holdings Plc (HSBA) and UBS (UBSN) AG were ordered to pay about $3.3 billion. The banks said in statements today that they have been working to improve controls and don’t tolerate such behavior.
Traders discussed which of their counterparts to include in chats and openly disclosed their positions with dealers at other banks just before the 4 p.m. WM/Reuters fix. That’s one of the most popular benchmarks for asset managers, and a time of day that was especially volatile for currency trading, so knowing other firms’ client orders beforehand could be advantageous.
Breaches of client confidentiality and inadequate chat-room supervision are at the heart of regulators’ findings in the foreign exchange probe that commenced over a year ago.
In another excerpt, traders at Citigroup, JPMorgan, and UBS debate whether to invite a fourth into a private chat room. “Are we ok with keeping this as is .. ie the info lvls & risk sharing?” the UBS trader asks at 7:49 a.m.
‘Protect Us?’
A minute later the JPMorgan trader tries to ensure that the new member puts the interests of the group first. “You know him -- will he tell rest of desk stuff -- or god forbin his nyk...” referring to New York colleagues.
The Citigroup trader then chimes in, “yes -- that’s really imp[ortant] q -- dont want other numpty’s in mkt to know,” according to the transcripts, which added the wording clarification.
“But not only that,” the trader added. “Is he gonna protect us like we protect each other against our own branches?”
Banks have cracked down on chat rooms over the past year, banning online discussions involving multiple parties at multiple firms. Regulators cited similar conversations in their settlements of their probes into the manipulation of the London interbank offered rate.
“Ultimately, it came down to the behavior of individual market participants,” said Marshall Bailey, president of the ACI Financial Markets Association, which represents more than 13,000 people working in financial markets including foreign exchange. “We must work with international regulators to strengthen and implement these internal controls and ensure they are applied across all institutions globally.”
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Barclays Pressed by New York’s Bank Regulator in FX Probe
New York’s top banking regulator is once again putting the pressure on a foreign bank -- this time over its currency-trading practices.
Benjamin Lawsky, the head of New York’s Department of Financial Services, refused to join a group settlement announced yesterday by U.S. and European regulators, causing Barclays Plc (BARC) to pull out at the last minute, according to a person familiar with the matter.
Lawsky decided the settlement over rigging foreign-exchange rates wouldn’t be severe enough and instead is continuing his own probe, said another person briefed on the matter who asked not to be named because the investigation isn’t public. He has also appointed a monitor, Devon Capital LLP, to review Barclays’s continuing conduct, confirmed John Padrnos, a partner at the advisory firm, which specializes in derivatives.
Barclays is in a unique position because it’s the only one of six banks in the settlements announced yesterday that relies on a license from the state of New York. Lawsky told Barclays last week that he wouldn’t join the other regulators, said the second person familiar with the matter. They settled for a total of $4.3 billion with Royal Bank of Scotland Group Plc, HSBC Holdings (HSBA) Plc, Citigroup Inc., JPMorgan Chase & Co., UBS AG and Bank of America Corp.
Barclays’s shares fell 2.17 pence in London, compared with a 0.3 percent drop by HSBC and a 0.95 percent decline by RBS. Barclays stock has declined 15.6 percent this year. Caitlin Ferrell, a spokeswoman for DFS, said the department had no comment on the Barclays matter.
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Exchange Rate Rigging Allowed to Thrive in 'Dark Data' Blindspots
The ability of groups of rogue traders to manipulate the foreign exchange market indicates how little banks actually know about themselves.
While much focus has been placed on the moral failings of the traders involved, a ‘smart data’ specialist has told us what is more worrying is the inability of the banks’ own internal compliance data management systems to identify foreign exchange manipulation.
It would seem that banks are still too ill-equipped to sift through and monitor their vast amounts of unstructured data within which manipulation and problems naturally reside.
"The evidence of corruption, unethical conduct and inappropriate behaviour among traders in this latest forex-rigging scandal will have been there since the beginning. The problem is that the banks' compliance departments, reliant on legacy technologies, have not been able to see it because it lies within Dark Data,” says Freddie McMahon, Director of Strategy & Innovation at Anomaly42.
Dark Data is simply that data which isn’t known about by the relevant compliance and oversight structures within the bank.
The Financial Conduct Authority, who issued the fines, has cited “ineffective controls” as being a key reason behind the forex scandal and have said they, “will require senior management at firms to take responsibility for delivering the necessary changes.”
According to McMahon banks will need to work together on data oversight if they are to deliver on this task:
“It's in unknown data, not the structured data of databases, KPIs and dashboards, where suspicious activities generally reside.
"One of the main causes of Dark Data is the fact that data is so heavily siloed within banks and across banks.
"This plays a key role in preventing suspicious activities coming to the fore. No one bank is connecting the dots. Instead, each sits within its own data silo.
"While corrupt traders may be communicating effortlessly, the banks are not and if we're to prevent further banking scandals, this has to change."
According to a PwC assessment of the exchange rate scandal, the reviews that need to be put in place will be wide ranging and include pricing, disclosure of information to clients, practices relating to sharing of information, communication controls and surveillance.
Improvement of controls over the WM Reuters and European Central Bank fix will also be required.
Simon Hunt, Financial Services Risk and Regulation partner and front office control specialist at PwC says:
"While there are many elements to building effective defences to prevent and detect misconduct or inappropriate behaviour, robust supervision and oversight of front office staff remains the essential cornerstone of the first line of defence. The industry has invested heavily in more effective supervision over the past two years, particularly to respond to previous unauthorised trading incidents. However, ensuring the broader conduct agenda is effectively embedded into supervisory mechanisms remains a work in progress."
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In terms of I am aware, just about every state provides their unique guidelines and rules regarding currency trading inside it. Thus, I wish to recognize, there exists almost any corporation, agency or even power which are guidelines and rules regarding world-wide currency trading.
UBS looking to take back bonuses from forex traders
UBS AG, among the six banks fined this week for their role in the global foreign exchange scandal, is looking at clawing back bonuses from its traders.
A UBS spokeswoman confirmed a Financial Times report, which said UBS and four other banks were preparing to take back millions of dollars in bonuses from traders.
Regulators on Wednesday fined six major banks a total of $4.3 billion for failing to stop traders from trying to manipulate the foreign exchange market, following a year-long global investigation.
Switzerland's financial regulator said on the same day that it had begun enforcement proceedings against 11 former and current unnamed UBS employees and that it would limit bonuses for some employees of the bank.
HSBC Holdings Plc, Royal Bank of Scotland Group Plc , JPMorgan Chase & Co and Citigroup Inc are the other banks looking to take back bonuses, according to the FT report. (on.ft.com/117702z)
JPMorgan declined to comment on the FT report, while RBS, Citigroup and HSBC were not immediately available to comment.
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They will limit the bonuses?
That is a travesty of law : the guys that should be in jail are going to get less for Christmas (the less meaning not going to get $50 million but "only" 25)