The forex scandal (also known as the forex probe) is a financial scandal that involves the revelation, and subsequent investigation, that banks colluded for at least a decade to manipulate exchange rates for their own financial gain.Market regulators in Asia, Switzerland, the United Kingdom, and the United States began to investigate the .3 trillion-a-day foreign exchange market (forex) after Bloomberg News reported in June 2013 that currency dealers said they had been front-running client orders and rigging the foreign exchange benchmark WM/Reuters rates by colluding with counterparts and pushing through trades before and during the 60-second windows when the benchmark rates are set.The behavior occurred daily in the spot foreign-exchange market and went on for at least a decade according to currency traders.
The electronic chatrooms had names such as "The Cartel", "The Bandits’ Club", "One Team, One Dream" and "The Mafia".
Regulators are particularly focusing in on one small exclusive chatroom which was variously called The Cartel or The Mafia.
The chatroom was used by some of the most influential traders in London and membership in the chatroom was highly sought after.
Among The Cartel's members were Richard Usher, a former Royal Bank of Scotland (RBS) senior trader who went to JPMorgan as head of spot foreign exchange trading in 2010, Rohan Ramchandani, Citigroup’s head of European spot trading, Matt Gardiner, who joined Standard Chartered after working at UBS and Barclays, and Chris Ashton, head of voice spot trading at Barclays.
Two of these senior traders, Richard Usher and Rohan Ramchandani, are members of the 13-member Bank of England Joint Standing Committee's chief dealers group.
At least 15 banks including Barclays, HSBC, and Goldman Sachs disclosed investigations by regulators.Barclays, Citigroup, and JPMorgan Chase all suspended or placed on leave senior currency traders.Deutsche Bank, continental Europe’s largest lender, was also cooperating with requests for information from regulators.Barclays, Citigroup, Deutsche Bank, HSBC, JPMorgan Chase, Lloyds, RBS, Standard Chartered, UBS and the Bank of England as of June 2014 had suspended, placed on leave, or fired some 40 forex employees.On 12 November 2014, the United Kingdom's Financial Conduct Authority (FCA) imposed fines totaling .7 billion on five banks for failing to control business practices in their G10 spot foreign exchange trading operations, specifically: Citibank 8 million, HSBC 3 million, JPMorgan 2 million, RBS 4 million and UBS 1 million.The FCA determined that between 1 January 2008 and 15 October 2013 the five banks failed to manage risks around client confidentiality, conflict of interest, and trading conduct.