Federal Reserve Board Bans Former UBS Trader for Currency Rigging

The U.S. Federal Reserve Board has announced that it is has banned a former UBS Group trader from participating in the banking industry for his manipulation of foreign exchange benchmarks.

Currency rigging

Matthew Gardiner used electronic chat rooms to coordinate Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term trading, facilitate manipulation of FX pricing benchmarks, disclose confidential customer information to traders at other organisations and engage in other unsafe and unsound practices, according to the Fed’s statement, and was alleged to have participated in the now infamous "instant-messaging group".

The Fed’s enforcement action against Gardiner follows the Board's May 2015 enforcement actions against both Barclays and UBS for unsafe and unsound practices related to their compliance and control failures concerning practices in the FX markets.

Those actions required UBS and Barclays to pay a total sum of $684 million in penalties for control deficiencies related to FX trading.

Focus on individuals

In recent years, the Fed has become increasingly assertive in terms of punishment of individuals for misconduct. When the agency fined six banks in 2015 for currency rigging, the regulator said that the lenders had to cooperate in the investigation against employees and is said to be prohibiting the organisations from re-employing or otherwise engaging individuals who were involved in unsafe and unsound conduct.

Gardiner, who is assisting US prosecutors with trying to build currency-rigging cases against individuals, has not yet been publicly charged.