After Bank Settlements FX Investigations Likely to Shift to Individuals

November 12th, 2014

A major wave of settlements with the banks involved in the foreign-exchange market manipulation investigations is expected to be finalized today, Wednesday, November 12, 2014.  According to Wall Street Journal reporting, however, this is just the first step in the enforcement agendas of the financial regulators from the United States (US), United Kingdom (UK) and Switzerland.

The Wall Street Journal reported that individuals close to the matters expect the ongoing investigations to turn to individual actors at the involved banks.  Apparently the Swiss Financial Market Supervisory Authority (FINMA) has already sent nearly a dozen enforcement letters to current and former bank employees thought to have engaged in improper and illegal behavior in their company’s foreign-exchange units.  The US Department of Justice (DOJ) and UK Serious Fraud Office (SFO) also plan to go after key individuals.

This investigation patterns aligns with a growing trend in regulatory enforcement.  Specifically, US and UK investigations have targeted individual actors as well as corporate actors, such as was the case in the LIBOR investigations.  Accordingly, bank management, compliance departments and individual bank employees should anticipate similar enforcement methods in the future and pay particular attention to corporate culture and individual employee training.


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