U.S. looking at alleged forex manipulation: source

Fri Oct 11, 2013 5:08pm EDT
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By Diane Bartz

WASHINGTON (Reuters) - The U.S. Justice Department is making inquiries into allegations of foreign exchange rate manipulation centered on the Swiss franc, but has left the heavy lifting to Europe, according to a source familiar with the probe.

The Justice Department spoke with participants in the probe but is letting officials in Europe take the lead in any investigation, said the source, who could not be named to protect business relationships. "Everybody's been interviewed," the source said.

Two traders from an unnamed Swiss bank have been let go from their jobs in connection with the allegations, said the source.

Investigations into the $5 trillion-a-day market have broadened, with authorities in Switzerland and Britain looking into whether traders at banks sought to manipulate benchmark foreign currency rates.

Royal Bank of Scotland (RBS.L: Quote) has already handed Britain's financial regulator instant messages sent by a former currency trader to counterparts at other banks, Reuters reported earlier this week.

The Justice Department declined comment on any U.S. inquiry.

Regulators and investors are concerned about the integrity of financial benchmarks in the wake of a global investigation into the rigging of interest rates.

So far four financial firms, including Switzerland's largest bank UBS UBSN.VX, have been fined about $2.7 billion and seven men have been charged as a result of the probes.   Continued...