Deutsche Bank AG (DBK), the world’s biggest foreign-exchange dealer, suspended several currency traders for suspected attempts to rig rates, according to two people familiar with the matter.
One trader suspended by Deutsche Bank dealt in the Argentine peso and was based in the Americas, said one of the people, who asked not to be identified because they aren’t authorized to speak publicly on the matter. The bank is examining employees’ electronic communications using search terms negotiated with regulators late last year and will suspend or reinstate workers based on those findings, the person said.
“Deutsche Bank has received requests for information from regulatory authorities that are investigating trading in the foreign exchange market,” Klaus Winker, a Frankfurt-based spokesman at the lender, said today in an e-mail. “The bank is cooperating with those investigations, and will take disciplinary action with regards to individuals if merited.”
The suspensions draw Germany’s biggest bank deeper into investigations by regulators around the world into possible fixing of foreign-exchange rates in the $5.3 trillion-a-day market. At least a dozen firms have been contacted by authorities, and at least 12 traders have been suspended, put on leave or fired. Bloomberg News reported in June that dealers at banks pooled information through instant messages and used client orders to move currency benchmarks.
Argentina’s peso doesn’t trade as much as other currencies. That means it’s more vulnerable to attempts to manipulate.
Benchmark manipulation allegations are “sapping at the very core of what we are trying to do,” Deutsche Bank Co-Chief Executive Officer Anshu Jain said in October.
Four banks control more than half the foreign-exchange market, according to a May survey by Euromoney Institutional Investor Plc. Deutsche Bank led with a 15.2 percent share, followed by Citigroup Inc. (C) with 14.9 percent, Barclays Plc with 10.2 percent and UBS AG, Switzerland’s biggest lender, with 10.1 percent.
All four have now disciplined currency traders amid the probes. Citigroup fired its head of European spot trading, Rohan Ramchandani, last week in relation to the investigations. Ramchandani and his lawyer didn’t respond to calls for comment.
The currency investigations are taking place as authorities grapple with a widening list of scandals involving the manipulation by banks of benchmark financial rates, including the London interbank offered rate, or Libor, and ISDAfix, used to determine the value of interest-rate derivatives. The U.K. regulator also is reviewing how prices are set in the $20 trillion gold market, according to a person with knowledge of the matter.
Germany’s financial regulator is “investigating the facts” and has “kept an eye on the currency trading issue since the summer,” Bafin spokesman Ben Fischer said in an e-mail today. He declined to comment on whether it’s a formal investigation or on any actions against individual banks.
Bafin, which has been probing other benchmarks including Libor and rates underpinning precious metals, said in October it had no plans for a “special” probe into currency-trading allegations because there was no sign German banks were involved.
Bloomberg reported this week that the Federal Reserve in the U.S. is also investigating the allegations. The U.S. Department of Justice, the Swiss financial regulator and the British Financial Conduct Authority are also conducting probes.
German newspaper Welt reported the bank had suspended at least one trader today.
Deutsche Bank has expanded its ban on the use of multibank chat rooms by its foreign-exchange business to cover all of its investment and transaction banking units as part of measures to prevent manipulation of foreign exchange. JPMorgan Chase & Co. (JPM) and Royal Bank of Scotland Group Plc have taken similar steps.
To contact the reporters on this story: Nicholas Comfort in Frankfurt at firstname.lastname@example.org; Karin Matussek in Berlin at email@example.com; Liam Vaughan in London at firstname.lastname@example.org