(Adds FCA comment, paragraph 8)
By Kirstin Ridley
LONDON, June 5 Britain's anti-fraud agency is
examining information from a global investigation into the
possible manipulation of currency markets, in the first sign it
might follow the United States in launching a criminal
Britain is keen to be at the forefront of a global inquiry
into the $5 trillion-a-day foreign exchange market, partly
because about 40 percent of it is based in London. Britain's
finance industry watchdog, the Financial Conduct Authority
(FCA), began its own probe into currency markets last year.
"The SFO (Serious Fraud Office) is receiving and examining
complex data on this topic. If and when we open a criminal
investigation, that decision will be announced in the usual
way," David Green, SFO head said in a statement.
The U.S. Department of Justice launched its own criminal
inquiry last October. But the SFO tends to be late to the party
when it comes to global investigations, partly because of a
tight annual budget. This forces it to ask its government
paymasters for specific funds to pursue complex inquiries.
Nevertheless, in a parallel global inquiry into whether
traders manipulated Libor benchmark interest rates, the agency
has now charged 12 individuals - more than the eight charged in
the United States - and is the only prosecutor to have brought
defendants to court.
BANKERS BEHAVING BADLY
The fact that material linked to the currency investigation
has landed on the SFO's desk could mean the FCA watchdog has now
found possible evidence of criminal wrongdoing during its own
examinations and passed this on, some lawyers said, although
agencies might also just be keeping each other abreast of more
"This happens when the regulators believe three things - the
matter is really serious, there is sufficient public interest or
political pressure to justify major budgetary commitment and
there seems to be enough evidence to convince a jury to the high
'beyond reasonable doubt' test rather than the lower 'more
likely than not' standard that a regulator is allowed to use,"
Simon Morris of law firm CMS Cameron McKenna, said.
"As well as overseas regulators, we are working very closely
with the relevant UK agencies, including with the Serious Fraud
Office. If we find evidence of criminal misconduct falling
outside of our powers we will pass that evidence on to the
Serious Fraud Office for them to consider investigating," an FCA
Its head of enforcement and financial crime Tracey McDermott
told Reuters just over a month ago she had yet to conclude there
had been any misconduct in the foreign exchange market, despite
trawling through reams of data.
The worldwide investigations into currency markets and
benchmark interest rates show banks are still struggling to
control some trader behaviour despite tighter regulatory
scrutiny in the wake of the 2008-2009 financial crisis.
Banks have already been fined around $6.0 billion by U.S.
and European regulators to settle allegations of Libor rate
fixing. Some are now quick to try to draw a line under any
suspicions of misconduct.
Having launched exhaustive internal investigations, banks
including Deutsche Bank, Barclays, Citigroup
, UBS and HSBC have fired, suspended or
placed on leave around 40 foreign exchange traders globally.
In some cases, their actions may turn out to be overly
hasty. British bank Lloyds said on Thursday it had
reinstated a foreign exchange trader suspended earlier this year
with no disciplinary action taken.
(Reporting by Kirstin Ridley, editing by Jane Merriman and