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SFO launches criminal investigation into forex rigging

The Serious Fraud Office has launched a criminal investigation into alleged rigging of foreign exchange markets.

The announcement comes after Bank of England governor Mark Carney told the Treasury select committee in March that manipulation in the unregulated foreign exchange markets could be a bigger problem than Libor rigging.

An SFO statement, published yesterday, says: “”The director of the SFO has today opened a criminal investigation into allegations of fraudulent conduct in the foreign exchange market.”

According to the Guardian, allegations are thought to centre around traders from rival banks using online chat rooms to collude in the fixing of benchmarks prices which are used as reference rates for trillions of dollars of investment and trade globally.

In March, as allegations of rigging came to light, Carney told the TSC that foreign exchange markets could require regulation.

The evidence session came one week after a member of staff at the Bank was suspended amid claims the individual had allowed traders to manipulate the market.

Carney first knew about the allegations last October, but defended the subsequent secret investigations and redacted minutes of board meetings.

The Bank’s executive director of markets Paul Fisher told MPs: “I have never come across specific allegations of people rigging the market until this news last year. The allegations are about the traders themselves. 

“It would have been very odd [for traders] to come to meetings with us and say ‘We are rigging the markets. What do you think?’ That is not going to happen.”

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