HSBC and Citigroup suspend foreign exchange traders amid rigging probe

US regulators arrive in London to step up joint investigation with Financial Conduct Authority into alleged market manipulation

The Guardian, Reuters, Friday 17 January 2014

The Canary Wharf offices of Citigroup and HSBC, which have both suspended
two foreign exchange traders. Photograph: Tom Jenkins for the Guardian

HSBC and Citigroup have both suspended foreign exchange traders as a global probe into possible currency market manipulation intensified.

Regulators from the United States arrived in London this week, stepping up an investigation in which they are working with Britain's financial watchdog, the Financial Conduct Authority, to determine whether traders at some of the world's biggest banks colluded to manipulate the $5.3 trillion-a-day (£3.2tn) foreign exchange market.

The investigations centre on senior traders' communication of client positions via electronic chatrooms, which also featured prominently in a probe into the rigging of a key interest rate known as the London interbank offered rate, or Libor.

As the currency investigation ramps up, the banks themselves are scrutinising their employees more closely and most are carrying out internal investigations.

Sources told Reuters that Deutsche Bank suspended several traders in New York this week, while US regulators descended on Citigroup's London offices.

A spokesman for HSBC confirmed on Friday the bank had suspended two foreign exchange traders in London, but declined further comment.

The two HSBC traders suspended are Edward Pinto and Serge Sarramegna, said a person with direct knowledge of the situation.

Their positions were not known, but Sarramegna has in the past been head of the G10 spot foreign exchange desk, according to numerous reports. Both men are listed as active on the UK regulator's register of financial industry professionals.

The two men could not immediately be reached at their office phones or company email addresses. Sarramegna could not be reached at his home in Essex.

A Citigroup spokesman said two foreign exchange traders had been sent "on leave".

The Citi traders are London-based Anthony John and Andrew Amantia, who works in New York, a source with knowledge of the matter said. Both are G10 spot currency traders at the US bank.

The source said the men were suspended on Thursday as a result of investigations into chatroom communications.

Neither man could be reached at their office telephone numbers.

Several traders at several banks have been suspended or sent on leave. Citi last week fired its head of European spot foreign exchange trading, Rohan Ramchandani, after a prolonged period on leave, one source with knowledge of the matter said.

Deutsche Bank, Citi and HSBC are three of the biggest players in the FX market.

The Financial Conduct Authority began a formal investigation into the currency market in October and the US justice department is also investigating possible manipulation.

The FCA is focusing on around 15 banks, which it has asked – or required – to provide information about currency trading activities.