There is a long way to go before we see real regulations of the Forex market in Russia. Most traders face uncertainty and have a lot of questions regarding how to proceed in the Forex market. Countries like Russia, the Ukraine, Belarus, and others, can take the regulations in developed countries as an example to draw their own rules.
The world's leading banks like, Lloyds, The Royal Bank of Scotland , Societe Generale, Credit Suisse, Deutsche Bank, and Goldman Sachs have been involved in an investigation against manipulation of LIBOR rates. This has obviously caused a surprise in the Forex market.
The analysts of the Binary Options Broker Optionova tried to figure out what is the cause of such scandal in the Forex market and whether traders at banks used opportunities for manipulation.
The head of the New York State Financial Services, Mr. Benjamin Losky required banks to provide documents about their currency trading operations. Among the banks that have received this message is Lloyds, Royal Bank of Scotland , Societe Generale, Credit Suisse, Deutsche Bank, and Goldman Sachs. Many branches of foreign banks in the U.S. and local banks are regulated by the Department of Financial Services, which operate under a state license.
Criminal and civil investigations are in effect in the United States, Hong Kong , and Switzerland after the United Kingdom regulators started investigating banking practices in the Forex market last year. Authorities in these countries have a suspicion that traders in banks colluded to manipulate prices in the currency market. The analysts of Binary Options Broker Optionova announced that people familiar with the investigation said that it is suspected that traders working in different banks shared information about customer orders and then agreed on the sequence of trades.
The CEO of the British financial management, Mr. Martin Wheatley believes that such charges are obnoxious as those that were presented during the investigation of manipulation of the LIBOR rate. To settle the charges at that time, one of the largest banks in the world made a deal and agreed to pay almost $6 billion dollars, while the daily market turnover was of 5.3 trillion dollars.
The major players in the banking industry are, Citigroup and Deutsche Bank with the city of London having the largest number of currency traders. The Bank of England estimates that the volume of currency trading in London fell by 12% from May to October of 2013. Mr. Wheatley said that the investigation won’t be completed by the end of the year.
Currency traders in major financial institutions are resigning for a reason. For instance, Anil Prasad head of Forex at Citigroup, gave up his 27 year job to supposedly engage in other activities. Stephen Cho, head of Forex trading and Leland Lim, head of trading in the Asia-Pacific region, both left their jobs at Goldman Sachs, but the bank refused to disclose the reasons for their departure. Rohan Ramchandani, head of the European Forex Citi was fired. The report notes that he was a member of the chat, which law enforcement officials called a “cartel” where bank employees shared information. Robert Walled and Christopher Fahey were fired from Deutsche Bank after Walled in November of last year.
The most famous and severe mistake for a Japanese trader was made when he tried to sell 1 share at 610,000 yen, but the trader sent a request to sell 610,000 shares at 1 yen. As a result of the mistake, the company J-Com lost more than $340 million, after an investigation was concluded, the leadership of the Tokyo Stock Exchange resigned.
In 2008, Jerome Kervel a trader of the French bank, Societe Generale was caught trading for 2 years without permission to have opened positions of almost 50 billion Euros, trading stock indexes. As a result, the bank lost $6.7 billion and the trader sentenced to 3 years in prison by the court.
The analysts of Binary Options Broker Optionova concluded that the current scandals connected with trading are a smoke curtain to hide the real manipulators, which may never come out of the shadows and we may never find out who they really are.
