HSBC and Citigroup Suspend Currency Traders

LONDON â€" HSBC and Citigroup each suspended currency traders on Friday amid ongoing investigations into potential manipulation of the $5-trillion-a-day foreign exchange market.

Citigroup confirmed on Friday that it had placed two spot traders, one in New York and one in London, on leave pending the outcome of the investigations. The bank fired the head of its European spot currency trading desk last week after he was placed on leave last year.

“HSBC can confirm the suspension of two foreign exchange traders in London,” a spokeswoman for HSBC said on Friday.

The suspensions were the first by HSBC in the expanding investigation and came just days after Deutsche Bank, the largest trader of currencies with about a 15.2 percent market share, placed several traders in its New York offices on leave.

More than a dozen traders at some of the world’s largest banks have been placed on leave amid questions about whether they colluded to fix benchmark currency rates.

Deutsche Bank said it was cooperating with the investigations and would “take disciplinary action with regards to individuals if merited.”

Authorities in the United States, Britain, Switzerland, Germany and Hong Kong have all begun investigations, which are in the early stages.

Many of the world’s largest banks, including Citigroup, Barclays and UBS, have acknowledged that they are subject to those inquiries. None of the banks nor any of the traders who have been suspended has been accused of wrongdoing.

Since the investigations became public, several banks, including JPMorgan Chase and Deutsche Bank, have restricted the ability of traders to engage in chat rooms where traders from their banking rivals are present.

The investigations have focused on the communications â€" and potential collusion â€" among groups of traders in instant message chat rooms, including one that earned traders at various banks the nickname “the cartel.”

The foreign exchange market is lightly regulated, and the banks that dominate the marketplace control the information about how currencies are priced.