Forex Trading: UBS suspends Six More Forex Traders

UBS has suspended six more forex traders across the globe, as the Swiss bank’s internal probe into alleged rigging of crucial currency benchmarks gains further traction.

The bank suspended three traders in New York, two in Zurich and one in Singapore, two people close to the situation said.

One of these people cautioned that some of those staff had just been placed on paid leave – a less serious move where the bank removes a trader from his duties pending the probe’s outcome.

The latest move underlines the rapidly widening scope of the global forex investigations that started last year – and brings the tally of staff suspended, placed on leave or fired to more than 30 across 11 banks and the Bank of England.

More than a dozen regulators across Europe, the US, Asia and Australia are investigating allegations that traders shared information about client orders and attempted to move forex benchmarks.

Forex Traders

The latest move by UBS marks the first time that a trader in Singapore, the world’s third largest forex trading hub, has been suspended in the currencies market probe.

UBS, the fourth largest forex trader by volume, declined to comment on the suspensions, some of which were first reported by Bloomberg.

Last year, UBS became one of the first banks to take action on concerns about forex when it suspended Niall O’Riordan, its global co-head of G10 foreign exchange. It now has at least seven traders suspended or placed on leave across three continents.

None of the traders has been formally accused of any wrongdoing. Mr O’Riordan has not responded to requests for comment.

Top bankers have said that they are dreading a repeat of the Libor interbank lending rate rigging scandal, which resulted in banks being forced to pay billions in fines to regulators, fire dozens of traders and face potentially costly civil litigation.

Legal experts have said that many more forex traders could be under review, as banks seek to avoid outright suspensions by limiting the duties of certain staff.

Several banks – including BarclaysRoyal Bank of Scotland and Citigroup – have also frozen bonuses for many traders in London, New York and elsewhere in areas that stretch beyond spot trading desks to derivative trading units.

UBS said earlier this month that it had extended its forex probe to include its precious metals business, which – unlike at most other banks – is part of its currencies unit.

“A number of authorities also are reportedly investigating potential manipulation of precious metal prices,” the bank said two weeks ago. “UBS has taken and will take appropriate action with respect to certain personnel as a result of its ongoing review.”

The gold market has become the latest area of trading to come under scrutiny in recent months, as regulators around the world have stepped up efforts to clean up various financial benchmarks in the aftermath of the Libor rigging scandal.

The UK’s Financial Conduct Authority has taken a preliminary look at the gold market, while Germany’s BaFin has launched an investigation into gold and silver trading.

Original story by Daniel Schäfer, Financial Times.

Gary Beal