Business

SFO drops probe into price-rigging in foreign exchange

Pound coins on dollar notes Image copyright Getty Images

The Serious Fraud Office (SFO) has closed a criminal investigation into allegations of price-rigging in the £3tn-a-day foreign exchange market.

It was set up in 2014 to look into allegations of "fraudulent conduct".

Now the investigation is being brought to an end.

"This decision follows a thorough and independent investigation lasting over one and a half years and involving in excess of half a million documents," said an SFO statement.

The investigation began after material was passed to the SFO by the UK's Financial Conduct Authority (FCA).

The FCA refused to comment on the SFO development.

Six banks - HSBC, RBS, Swiss bank UBS and US banks JP Morgan Chase, Citibank and Bank of America - were collectively fined £2.6bn in 2014 by UK and US regulators over their traders' attempted manipulation of foreign exchange rates.

And in 2015, Barclays, JP Morgan, Citibank, RBS and UBS were fined by US authorities for misconduct in foreign exchange trading.

'Detailed review'

It had been alleged that traders used online chatrooms to plan the fixing of benchmark prices.

The SFO statement said it had concluded "based on the information and material we have obtained, that there is insufficient evidence for a realistic prospect of conviction".

"Whilst there were reasonable grounds to suspect the commission of offences involving serious or complex fraud, a detailed review of the available evidence led us to the conclusion that the alleged conduct, even if proven and taken at its highest, would not meet the evidential test required to mount a prosecution for an offence contrary to English law," it added.

"It has further been concluded that this evidential position could not be remedied by continuing the investigation."

The SFO said it would continue to liaise with the US Department of Justice over its investigation, launched in October 2013.

'Innocent until proven guilty'

Mark Taylor, Dean and Professor of Finance at Warwick Business School, said: "I'm not really that surprised. They needed cast iron evidence of collusion.

"Obviously it's not strong enough to test in court. I don't blame the SFO if they didn't have the evidence.

"I'm sure there are a few relieved traders out there, to be honest. People might say there is an issue in that people got away with it, but they are innocent until proven guilty."

Mr Taylor, a former adviser to the Bank of England's Fair and Effective Markets Review, added: "It's time to move on. It would tarnish the reputation of the City more to have this dragged out over the next year or so."

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