BLOOMBERG: Traders Join Exodus as Forex Probes Add Pressure
on Costs (ILLEGAL CURRENCY MANIPULATION)
Traders
Join Exodus as Forex Probes Add Pressure on Costs
By Edward
Evans and Andrea Wong Apr 30, 2014 3:08 PM ET
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 Photographer: Nadine
Hutton/Bloomberg
An
employee counts mixed denomination rand currency banknotes at the Forex
department... Read More
The foreign-exchange market is losing a slew of traders from
big banks as a probe into alleged manipulation of benchmark rates widens and
pressure mounts on the industry to reduce costs.
More than 30 traders from 11 firms have been fired, suspended,
taken leaves of absence or retired since October, when regulators said they
were investigating the market, according to data compiled by Bloomberg.
London-based Barclays Plc (BARC) and
Zurich-based UBS AG (UBSN) have been the
worst-hit, each suspending at least half a dozen employees, the data show.
“That’s a considerable percentage of the workforce,” said Brad
Bechtel, managing director at Faros Trading LLC in Stamford, Connecticut,
who estimated the world’s largest banks have 80 to 160 voice traders for spot
rates in the currencies market. “That explains the lack of liquidity in the
market, and why what would normally be considered a small trade can actually
push the market around more than normal.”
Regulators around the world are investigating allegations
traders colluded to rig key foreign-exchange benchmarks used by investors and
companies by pushing through trades before and during the 60-second windows
when the WM/Reuters rates are set. At the same time, banks are trying to
fight shrinking margins by replacing humans with computers, accelerating a
longer-term shift in trading onto electronic platforms.
 Photographer: Jason
Alden/Bloomberg
Barclays
Plc and UBS AG have been the worst-hit, each suspending at least half a
dozen...Read More
About 200 traders at smaller firms focus on spot exchange
rates, Bechtel estimated in an e-mail.
UBS gained less than 1 percent to 18.40 Swiss francs today in
Zurich. Barclays rose 0.8 percent to 252.2 pence in London.
‘The Mafia’
Authorities are examining whether bank traders communicated
with dealers at other firms and timed trades to influence benchmarks and
maximize profits. Some exchanged information on instant-message groups with
names such as “The Cartel,” “The Bandits’ Club,” “One Team, One Dream” and
“The Mafia.” No firms or traders have been accused of wrongdoing by
government authorities.
Regulators from Bern, Switzerland,
to Washington opened inquiries into the $5.3 trillion-a-day market afterBloomberg News reported
in June that traders colluded to rig the WM/Reuters rates. No firms or
traders have been accused of wrongdoing by government authorities.
Chris
Ashton, global head of spot trading at Barclays, was suspended
last year along with other spot traders at the bank in London and New York.
New York-based Citigroup Inc. (C) said in January
it fired its head of European spot trading, Rohan Ramchandani.
Authorities
are examining whether bank traders communicated with dealers at other firms...Read More
Personal Reasons
While many personnel moves were prompted by the probes, some
people pointed to other motivations while stepping back.
Lloyds Banking Group Plc (LLOY)’s global
head of spot foreign exchange, Darren Coote, resigned from the London-based
firm for personal reasons, people with knowledge of the move said earlier
this month.
James Pearson, Royal Bank of Scotland Group Plc’s head of
trading for currencies in Europe, the Middle East and
Africa, is taking a five-month sabbatical, also for personal reasons, the
Edinburgh-based company said this week.
Deutsche
Bank AG (DBK) said this week that its global head of
foreign exchange, Kevin Rodgers, will retire in June. Rodgers, 52, plans to
focus on academic and musical interests, according to the Frankfurt-based
bank. His decision wasn’t prompted by the inquiries, according to a person
briefed on his plans.
To contact the reporters on this story: Edward Evans in Davos,
Switzerland at eevans3@bloomberg.net;
Andrea Wong in New York at awong268@bloomberg.net
To contact the editors responsible for this story: Christine Harper at charper@bloomberg.net;
Dave Liedtka at dliedtka@bloomberg.net David
Scheer, Dan Reichl
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