NYT: sinkhole of Wall Street corruption widens

by Leslie Turk

National newspaper reports this week that big banks will face another round of federal charges.

The New York Times reported Monday that the Justice Department is once again going after the world's biggest banks, this time delving into whether traders conspired to manipulate the currency markets. It's expected that these new investigations will result in the indictment of bank employees, the newspaper reports:

With evidence mounting that a number of foreign and American banks colluded to alter the price of foreign currencies, the largest and least regulated financial market, prosecutors are aiming to file charges against at least one bank by the end of the year, according to interviews with lawyers briefed on the matter. Ultimately, several banks are expected to plead guilty.

Interviews with more than a dozen lawyers who spoke on the condition of anonymity to discuss private negotiations open a window onto previously undisclosed aspects of an investigation that is unnerving Wall Street and the defense bar. While cases stemming from the financial crisis were aimed at institutions, prosecutors are planning to eventually indict individual bank employees over currency manipulation, using their instant messages as incriminating evidence. ...

Yet the breadth of the suspected wrongdoing in the currency inquiry - Deutsche Bank, Citigroup, JPMorgan Chase, Barclays and UBS are among the dozen or so banks under investigation - might distinguish it from the piecemeal nature of the crisis-era investigations.

Read the story here.

Bloomberg followed that report Tuesday with a story that Rabobank Groep, the Dutch lender fined $974 million last year for rigging interest rates, suspended two London-based foreign-exchange traders after an internal investigation into their dealings.

Two people were placed on leave of absence as a result of the currencies inquiry, Rabobank spokesman Hendrik Jan Eijpe, based in the Dutch city of Utrecht, told Bloomberg by e-mail.

The Rabobank suspensions are not directly tied to the new investigations by regulators first reported by the NYT.

Read the Bloomberg story here.