LONDON — Two weeks ago, Charles-Henri Sabet, a 52-year-old former Swiss backgammon champion and longtime foreign exchange trader, took over as executive chairman of the London Capital Group, an online trading services firm that has struggled in recent years. He quickly turned to hiring senior executives.
Among his top recruits was Rohan Ramchandani, the former head of Citigroup’s European spot foreign exchange trading who was suspended by the bank last fall and fired this year as a global investigation mounted into suspected manipulation of the currency market.
“He will be a great value to the firm,” said Mr. Sabet, sitting in his empty office with multiple black screens turned off and organizational charts spread over his desk. “He’s known in all the banks and the hedge funds.”
Mr. Ramchandani has not been accused of any wrongdoing, and Mr. Sabet said he was not under investigation. “If he were under investigation, we would not hire him,” Mr. Sabet said. The hiring was cleared with London Capital’s board, its lawyers, the Financial Conduct Authority and Mr. Ramchandani’s lawyers — suggesting he was indeed in high demand.
The hiring exemplifies Mr. Sabet’s full-speed-ahead approach to building a foreign exchange business, a market he knows well. A former competitive tennis player and champion backgammon player from Lausanne, Switzerland, he skipped college to focus on gambling. Through backgammon, he became involved in foreign exchange trading and became chief dealer at the Swiss Bank Corporation, which is now UBS. In 1991, he built a foreign exchange business in Switzerland called Trading and Commercial Consulting, which eventually became Synthesis, a Swiss Bank.
He sold Synthesis to Saxo Bank in 2007 in a deal that quickly went sour. Mr. Sabet says he disagreed with management changes and wanted to leave. But the company accused him of participating in insider trading. “I did nothing wrong,” he said, noting he and the bank eventually settled. Mr. Sabet and his family moved to Monaco for seven years.
He eventually grew bored in Monaco. “I was going crazy,” he said. With other investors, he structured an investment that would give him control of London Capital, which is publicly listed.
He is setting up a foreign exchange shop as regulators around the world investigate the $5 trillion-a-day foreign exchange market. One British regulator said that the outcome could be as bad for the banks as the investigation into the rigging of the London interbank offered rate, or Libor. Banks have paid billions of dollars in penalties in the Libor case, and dozens of traders have been suspended or fired in connection with the foreign exchange investigation.
Mr. Sabet seems unfazed by the investigation, which he says is a problem for the banks, not the individuals.
“The banks made a wrong compliance choice and let their employees into the chat rooms,” he said, referring to chat rooms that traders are accused of using to collude on prices. The authorities are also investigating front-running, or trading ahead of clients, said a person briefed on the areas of inquiry.
When asked whether he worried about the reputational effect of hiring someone caught up in the investigation, he noted that hedge funds like Brevan Howard and the Fortress Investment Group were doing the same.
“These are some of the best hedge funds in the world,” Mr. Sabet said. “They are hiring them, too, and the traders will make twice as much money” as they did at the banks.
Mr. Ramchandani, who declined to comment, will not have a so-called control function at London Capital but will be an adviser on all spot foreign exchange trading. He can also trade for the company but not for clients, Mr. Sabet said.
He said finding good talent had become more difficult.
“You have a scandal in banking every day,” he lamented. “They all want to work for Facebook and Nike. They have a chance to make money and people admire them, they don’t criticize them.”
Mr. Sabet is also dealing with a market that will be radically reshaped by new regulation and technology.
Mark Taylor, dean of Warwick Business School and a professor of finance, said he expected more regulation. “It’s a tough market to regulate because by definition, it’s a global financial market,” he said. “So where do you regulate it?”
Many banks have quietly lamented changes in foreign exchange market, specifically a move toward more online and thus transparent trading where spreads are thinner and profits smaller, but Mr. Sabet appeared more reconciled to the changes.
“The financial world is being completely regulated,” he said. Everything is becoming electronic and automated, he said, which makes compliance easier. “A human can’t make a mistake because a human is not involved.”