Brazil names 30 bankers in forex probe

Any individual found guilty of manipulating exchange rates could face multi-million pound fines

Brazil finance minister pledges to stop US 'melting the dollar' . The Brazilian real has risen more than 35pc against the dollar since early 2009 leading some economists to label it the most over-valued currency in the world.
Brazilian authorities fear banks may have fiddled exchange rates Credit: Photo: Bloomberg

The Brazilian authorities have widened their investigation into alleged foreign exchange manipulation, naming 30 bankers as part of the probe.

The state is the latest to launch investigations into the market, and follows high-profile investigations in the UK and US.

Competition authority Cade said it is looking into the possibility that traders shared competitively sensitive information in chatrooms with the aim of fixing prices to make bigger profits, to the detriment of customers. Such information could include details of client orders, as well as trading strategies, the regulator said. Cade said it is looking at activity in forex markets between 2007 and 2013.

It noted that some of the traders used online chat groups with names such as "the cartel" and "the mafia".

"The anti-competitive practices have direct and indirect effects in the Brazilian territory and allowed participants to conduct operators to position themselves better to make a profit and avoid/minimize losses to the detriment of customers," Cade said.

"Although the spot and forward currency markets [involve] thousands of daily transactions worldwide, it is estimated that among the potential customers affected are: banks, investment funds, individuals (eg, investors, tourists, etc), private companies, and government entities, among others, who have engaged in any exchange spot transactions or transactions involving foreign exchange reference rates."

Cade - which stands for Conselho Administrativo de Defesa Econômica, or the Administrative Council for Economic Defence - has not said what any of the individuals may have done wrong, but did say it has substantial civil powers to punish anyone who is found guilty of misconduct.

Its public note explaining its actions said fines for individuals range from 50,000 reals to 2bn reals - between £10,000 and £400m.

Meanwhile, any bank found to have broken competition law could face a fine of between 0.1pc and 20pc of its gross revenues in the previous year.

Fifteen banks are listed in Cade's statements, including HSBC, Barclays, RBS, Citi, Credit Suisse, UBS, JP Morgan and Standard Chartered.

The 30 bankers include ex-RBS and JP Morgan trader Richard Usher; Barclays and ex-UBS trader Chris Ashton; Mr Ashton's colleague and former RBS worker Michael Weston; Mark Clark, who also worked with Mr Ashton at Barclays; Citi's former European head of spot trading Rohan Ramchandani; Paul Nash, from RBS; former UBS and Standard Chartered worker Matthew Gardiner; Mr Gardiner's former boss at UBS Niall O'Riordan; and Eduardo Hargreaves from Standard Chartered.

The banks named by the Brazilian authorities declined to comment.

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