Banks including JPMorgan Chase are considering banning traders from electronic chat rooms in the wake of the international foreign exchange investigation, according to people familiar with the matter.
The sites – which allow users to exchange information and gossip about markets – are one area of regulators’ inquiries into whether traders colluded to profit illegally from moves in currencies.
Regulators in the UK, US, Switzerland and Hong Kong are investigating whether traders from at least 10 large global banks attempted to move foreign exchange benchmarks.
They allege that various groups of senior traders from rival banks – with nicknames such as “the mafia”, “the cartel” and “the Sterling lads” – used chat rooms to share information about client orders and traded ahead of them.
Banks reviewing access to chat rooms, some of which are accessed by Bloomberg terminals, believe they might encourage banter that later draws the scrutiny of officials, regardless of whether any actual wrongdoing takes place.
Executives at JPMorgan are examining whether conversations on so-called “multi-dealer” chat rooms cannot be carried out bilaterally over the phone, according to one person familiar with the discussions. JPMorgan declined to comment.
At least 12 traders across six banks are on leave after a series of suspensions in recent weeks following enquiries from regulators.
Barclays, Citigroup, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan Chase, Royal Bank of Scotland and UBS are among the banks to have confirmed publicly that they are co-operating with regulators in the investigation.
Lloyds last week said it had launched a review of its currencies trading, while Credit Suisse’s chairman said in a newspaper interview last month that it was also looking into the matter. French bank Société Générale had started an examination, people close to the situation said.
Executives across the sector, worried that the probes will turn into as large a legal problem as the Libor rigging scandal, have ordered these internal investigations.
Bruised by heavy fines levied on some banks for Libor manipulation, they are rushing to hand over information particularly to the European antitrust regulators in Brussels in the hope of leniency.
The review of traders’ access to chat rooms was first reported by the Wall Street Journal.
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