Banks consider ban on chat rooms after rigging probe -sources

Mon Nov 11, 2013 10:32am EST
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By Jamie McGeever

LONDON Nov 11 (Reuters) - Big banks are considering banning traders from some online chat rooms in response to investigations into alleged collusion between dealers over key financial market benchmark rates, people familiar with the matter said on Monday.

JPMorgan Chase, Credit Suisse Group and Citigroup Inc, among others, are reviewing chat room use over concerns that some of those forums are seen by regulators as potential venues for collusion and market manipulation.

The banks are targeting so-called multilateral chat rooms, in which many dealers participate at the same time. Bilateral communications between individual traders and their counterparts at other banks, and between traders and their clients, are not under review, the sources said.

Regulators and investors are concerned about the integrity of financial benchmarks after investigations into the rigging of a key interest rate known as the London interbank offered rate, or Libor, which has already cost banks billions of dollars in settlements.

A global probe into alleged currency manipulation is focusing on chat rooms with names such as "The Cartel," in which traders from many of the big banks are alleged to have colluded to manipulate foreign exchange (FX) rates, the Wall Street Journal reported earlier.


Chat communications featured prominently in a five-year probe into Libor. The probe into alleged FX rigging only surfaced in June but has snowballed in recent weeks, with regulators from the United States, Switzerland and Britain confirming they are investigating.   Continued...