FX Traders’ Facebook Chats Said to Be Sought in EU ProbeAoife White and Gaspard Sebag
Foreign-exchange traders’ messages on Facebook Inc. are being sought by European Union antitrust regulators as they expand a probe into alleged collusion between banks beyond work e-mails and instant messages, two people with knowledge of the case said.
Banks have been asked to supply all communications between traders, including social media, said three people who didn’t want to be named because the EU’s requests are private. The EU suspects that some e-mails and online messages have been erased to destroy signs that traders were illegally swapping information, one of the people said.
Chats between traders of products linked to the London and euro interbank offered rates provided key evidence for global probes that have fined banks more than $6 billion to date. One trader offered to pay a broker “whatever you want” to keep the yen Libor rate “as low as possible,” according to excerpts released by U.K. and U.S. regulators in 2012.
“It’s a very important case because the forex markets every day exchange billions and billions of euros,” EU antitrust chief Joaquin Almunia told Bloomberg TV last month. Regulators have got “some contributions from people that warned us of the possibility of collusion,” he said.
Not all banks involved in the EU’s probe into foreign-exchange rates have been asked to supply more details of communications between traders outside of work e-mail and instant-messaging services, according to three other people with knowledge of the EU’s currency-rigging case.
While banks must comply with an EU request to hand over information they control, “it may not be able to deliver if the accounts are truly private,” said Stephen Kinsella, a lawyer at Sidley Austin LLP. “Perhaps in future” regulators “should just ‘friend’ all traders.”
HSBC Holdings Plc’s foreign-exchange trading is being reviewed by the EU and other authorities and it’s cooperating with regulators, according to a filing in August. JPMorgan Chase & Co., Citigroup Inc., Deutsche Bank AG, UBS AG, Barclays Plc and Royal Bank of Scotland Group Plc have said they are cooperating with global regulators on foreign-exchange investigations.
The European Commission, Deutsche Bank, Barclays, Citigroup, RBS and UBS declined to comment, as did Facebook representatives. JPMorgan and HSBC didn’t immediately respond to a request for comment.
Worldwide fines related to investigations into the $5.3 trillion-a-day foreign-exchange markets may cost banks $41 billion, Citigroup analysts said earlier this month.
Deutsche Bank, JPMorgan and RBS are among banks that have restricted the use of chatrooms as regulators examine messages for evidence that traders manipulated currencies or benchmark rates.