Gavin Finch and Liam Vaughan are Bloomberg News reporters based out of Bloomberg’s London bureau. Gavin has been at Bloomberg since 2006, covering a variety of financial stories, particularly investment banking and financial crime. Liam has been at Bloomberg since 2011, covering various market stories with a focus on financial crime.
Together, the two of them worked to uncover a massive currency-fixing scandal involving some of the world’s biggest banks.
In Depth spoke with Gavin and Liam to discuss their collaborative process and the work they did to unearth the facts that led to regulatory probes across the globe.
How did you stumble upon this currency-fixing story?
LV: We’d spent the previous year covering the Libor scandal, and a Bloomberg reader got in touch with a colleague, Lindsay Fortado, to express his concerns that a key benchmark used in the currency markets known as “the fix” was similarly open to abuse. Gavin and I went away and investigated the tip. We decided pretty quickly that there may indeed be a problem.
Was it difficult to develop this story? Were there challenges in finding sources and cultivating the relationships with them that you needed to extract information?
LV: At first, it was a case of speaking to as many people as we could — traders, investors, the companies that own the benchmark — and educating ourselves. It’s a pretty technical area, so that was important. The source of the original tip had no evidence of wrongdoing, so we had to start from scratch. The biggest breakthrough came when our colleague Amber Choudhury found a senior FX trader who was willing to walk us through the manipulation step by step. That helped us gain the knowledge to approach other sources. Whenever we felt like we had enough, our editors in the U.S. and London pushed us for more information and better sourcing. It was frustrating at the time, but it ultimately made for a much stronger story.
GF: It was difficult to get people to talk to us due to the sensitivity of the subject matter. After a lot of phone calls and many rejections, we did find some traders were willing to talk, though. I think at first a lot of these guys didn’t see anything wrong with what they had been doing and so wanted to explain their actions to us. That helped us a lot. We painstakingly built up relationships with these sources.
Was it challenging for the two of you to work together? How did you go about sharing responsibilities?
GF: Liam and I work very well together. We are friends as well as colleagues. I think that is important when collaborating on an investigation that will likely run for years. He is naturally suited to writing features while I am more adept at breaking news. When you put the two together, you get a pretty effective package. While there have been disagreements on where we should take the story, that friction can be positive as it sparks new ideas.
What has the impact of your work been? Have these stories brought about real change?
GF: The fallout so far has been pretty immense. The stories prompted regulators including the F.B.I., U.S. Justice Department, the Federal Reserve, Britain’s Financial Conduct Authority, the European Union and Switzerland’s Financial Markets Authority to open formal investigations into currency trading. The world’s biggest banks have fired, suspended or put on leave at least 22 traders.
LV: The impact has surpassed any expectations we had when we first started writing about this subject. There are ongoing investigations at more than a dozen regulators on three continents. Traders at banks like Goldman Sachs, Citigroup and RBS have been banned from communicating with more than one other person at a time. Those suspicious trading patterns have all but disappeared, saving investors around the world billions of dollars.