Wall Street Traders and Chat Rooms Don’t Mix Well

By Derek Hunter

Several large banks agreed to a $4.3 billion joint civil settlement with U.S., U.K. and Swiss regulators on Wednesday over currency exchange manipulation by its traders. Similar to the historic LIBOR settlements over the last few years, the six banks settled charges that they took steps designed to boost their profits by manipulating one of the world’s largest and most interconnected markets, sometimes at the expense of their clients. In secret chat rooms, traders from multiple banks would disclose confidential information to allow them to manipulate foreign currency prices and make a profit for themselves.

BloombergView discusses what these traders did wrong, how it compares to the LIBOR manipulation, and why this will not be the last we hear about these foreign currency manipulators.