In FX rigging: "If you ain't cheating, you ain't trying"

LONDON, May 20 (Reuters) - Foreign exchange traders clubbed together in a brazen “heads I win, tails you lose” strategy to rip off customers as they rigged the $5 trillion-per-day currency market, British and U.S. authorities said on Wednesday.

Transcripts released as part of a multi-billion dollar settlement are littered with examples of how customers were misled and prices manipulated in a trading scandal that has seen seven of the world’s top banks fined around $10 billion and four plead guilty to trying to manipulate forex rates.

In October 2009, traders in the dollar and Brazilian real market agreed to boycott a local broker to help drive down prices and between 2008 and 2014, bank salespeople marked up prices without their clients’ knowledge, regulators said.

One forex salesperson wrote in a chat to an employee at another bank: “hard mark up is key... but i was taught early...u dont have clients...u dont make dont be stupid.”

A Barclays employee was quoted as saying in 2010: “markup is making sure you make the right decision on price... which is whats the worst price i can put on this where the customers decision to trade with me or give me future business doesn’t change...if you aint cheating, you aint trying.”

Mark-ups were a key revenue source for the British bank, the regulator added.

“Mess this up and sleep with one eye open at night” one Barclays trader was told in 2011 after being admitted into an exclusive chat room called “The Cartel”, in which traders used coded language to manipulate benchmark exchange rates, U.S. authorities said.

The chat room was highlighted by authorities as they extracted fines and felony charges from some of the world’s biggest banks for allowing dollar and euro traders to coordinate to manipulate rates set at daily 1:15 pm and 4:00 pm “fixings”.

Traders and sales staff at Swiss bank UBS, which avoided a criminal charge over its foreign exchange practices but saw a previous U.S. non-prosecution agreement over Libor interest rate rigging ripped up, used hand signals to conceal mark-ups from customers, according to U.S. authorities.

Calling themselves “the players”, “the 3 musketeers” and with cries of “we all die together”, groups of traders shared confidential information to set trading strategies and attempt to reap profits by manipulating currency fixes.

Once the fix had been published, congratulations flowed. “boys well donetop work”, one trader was quoted as saying. Staff at Barclays were quoted as adding “we deliveredbut i dont wanna kiss from ui just take a beer”.

Citigroup, JPMorgan, RBS and Barclays pleaded guilty on Wednesday to trying to manipulate foreign exchange rates and six banks were fined a total of nearly $6 billion in a deal that brings the end in sight of a global inquiry into misconduct in the market.

The latest settlements come after the FCA, the U.S. Commodity Futures Trading Commission (CFTC), the Office of the Comptroller of the Currency (OCC) and Swiss regulator FINMA last November slapped penalties totalling $4.3 billion on six global banks for alleged currency rigging, including HSBC, UBS and Bank of America. (Reporting by Kirstin Ridley; Editing by Alexander Smith)