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TIMELINE-The global FX rigging scandal
January 11, 2017 / 5:10 PM / 10 months ago

TIMELINE-The global FX rigging scandal

LONDON, Jan 11 (Reuters) - The U.S. Justice Department’s charges against three former currency traders on Tuesday brought a new twist to a rigging scandal that engulfed the world’s largest financial market, saw dozens of traders fired and big banks fined around $10 billion.

Richard Usher, formerly of JPMorgan, Rohan Ramchandani, formerly of Citigroup, and Christopher Ashton, formerly of Barclays, were charged with conspiring to restrain trade in an indictment filed at a federal court in Manhattan.

The three were members of the “Cartel” chatroom in which they are alleged to have shared sensitive client order information to manipulate exchange rates.

Below is a timeline on the scandal that consumed the largely unregulated $5.3 trillion-a-day market. 2017 Jan. 10: U.S. Department of Justice indicts three London-based former traders and members of “The Cartel” chatroom, Rohan Ramchandani, Richard Usher and Chris Ashton. Jan. 4: Former Barclays trader Jason Katz becomes the first person to admit criminal wrongdoing in the FX probe, pleading guilty to U.S. charges to participating in a price-fixing conspiracy. 2016 March: Britain’s SFO closes its FX investigation without having brought any charges, saying “the alleged conduct, even if proven and taken at its highest, would not meet the evidential test required to mount a prosecution for an offence contrary to English law.” 2015 Nov.: Ex-Citi trader Perry Stimpson wins his unfair dismissal hearing at an employment tribunal in London. May: The U.S. DOJ fines six banks (Citi, JP Morgan, HSBC, RBS, Barclays and Bank of America Merrill Lynch) a total of $6 billion. The first five pleaded guilty to felony charges, while BAML was fined for compliance failures. 2014 Dec.: Former RBS trader Paul Nash is the first individual to be arrested. Nov.: British and U.S. authorities fine six of the world’s biggest banks - Citi, JP Morgan, HSBC, RBS, UBS and Bank of America Merrill Lynch - a total of $4.3 billion for failing to prevent their traders sharing clients’ order information and attempting to manipulate the market. Nov.: The Bank of England fires chief dealer Martin Mallett, and announces it has scrapped the regular chief dealers meetings for good. July: Britain’s Serious Fraud Office formally opens investigation into FX rigging. March: The Bank of England suspends Martin Mallett, and appoints Lord Anthony Grabiner to lead an independent investigation into what the Bank knew of alleged currency market collusion and manipulation. Feb.: The Financial Stability Board, the world’s top financial regulator which coordinates policy for the G20, says it will review FX fixings. Feb.: New York’s banking regulator opens its investigation. Jan.: Citi fires chief dealer Rohan Ramchandani, a member of the BoE-chaired chief dealers group and the first trader in the unfolding scandal to be sacked. 2013 Dec.: Several banks, including JP Morgan Chase, Goldman Sachs and Deutsche Bank ban traders from multi-dealer electronic chatrooms. Oct.: The investigation goes global. The DOJ, Britain’s Financial Conduct Authority and Bank of England, and Switzerland’s market regulator all open probes. The Hong Kong Monetary Authority says it is cooperating. Sept.: Swiss bank UBS provides the U.S. Department of Justice with information on FX allegations in the hope of gaining antitrust immunity if charged with wrongdoing. July: A scheduled chief dealers meeting for July 4 never takes place. June: Bloomberg News reports dealers used electronic chatrooms to share client order information to manipulate benchmark exchange rates at the 4:00 p.m. London “fixing”. These chatrooms had names such as “The 3 Musketeers” and “The Cartel”. Feb.: The chief dealers group meets for what will be the last time. 2012 April: As the Libor scandal reaches its zenith, the regular FX chief dealers meeting included a “brief discussion on extra levels of compliance that many bank trading desks were subject to when managing client risks around the main set piece benchmark fixings,” BoE minutes say. 2008 July: A meeting of the BoE’s FX Joint Standing Committee’s chief dealers sub-group discusses the suggestion “that using a snapshot of the market may be problematic, as it could be subject to manipulation,” BoE minutes say. May: Minutes of a meeting of the FX chief dealers say there was “considerable discussion” on the benchmark “fixings” again. Spring: The Federal Reserve Bank of New York makes enquiries into concerns surrounding benchmark Libor interest rates, sharing its analysis and suggestions for reforms with “the relevant authorities in the UK.” 2006 July: Minutes of a chief dealers meeting say the group discussed “evidence of attempts to move the market around popular fixing times by players that had no particular interest in that fix. It was noted that ‘fixing business’ generally was becoming increasingly fraught due to this behaviour.” 2005 July: The first meeting of the Bank of England’s FX Joint Standing Committee’s chief dealers sub-group. These get-togethers between top London-based FX traders and senior BoE officials will become known as the chief dealers meetings. They will be held regularly every year up to 2013, where the traders and Bank officials will discuss market trends and issues. Every meeting will be chaired by BoE chief dealer Martin Mallett. (Compiled by Jamie McGeever)

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