Forex scandal

The Forex scandal was a financial scandal discovered in 2013. For at least a decade, some of the world's biggest currency exchange banks worked together to control the daily foreign exchange rates.

History

Bloomberg article

In June 2013, according to Bloomberg News, some currency traders admitted manipulating the foreign exchange benchmark. Foreign exchange rates are set based on this benchmark.

Working together, on a daily basis, these individuals were deliberately trading just before and during the 60-second window when the benchmark rates were set. This allowed them to control the foreign exchange benchmark, and thus control the daily foreign exchange rates. The behavior occurred daily in the spot foreign-exchange market and went on for at least a decade, according to traders cited by Bloomberg.

Official investigations

After the Bloomberg article, market regulators in Asia, Switzerland, the United Kingdom, and the United States began investigating the $5.3 trillion-per-day foreign-exchange market.

Regulators investigated at least eleven multinational banks. These included Deutsche Bank, continental Europe’s largest lender; the British banks Barclays and HSBC; and the American bank Goldman Sachs.

Senior currency traders were suspended, or placed on leave, by Barclays, Citigroup, and JPMorgan Chase.