A look at what will happen next in the world economies
Tuesday, November 18, 2014
Goldman Ousts Currencies Trader Connected to Probe
I just love these headlines when i commented on this 3 or more years ago that manipulation was happening, and how, and we are now so amazed. Aivars Lode
LONDON— Goldman Sachs Group Inc., which wasn’t punished in last week’s foreign-exchange-manipulation settlements with U.S. and British regulators, has ousted a currencies trader who allegedly was involved with the misconduct before he joined the firm.
Frank Cahill, who joined Goldman Sachs in 2012 as a currencies trader after working at HSBC Holdings PLC, was asked to leave Goldman’s London offices on Tuesday as a result of his alleged involvement in the currencies-rigging affair, according to a person familiar with the matter.
“This relates to a period before he joined Goldman Sachs and he has now left the firm,” a Goldman Sachs spokeswoman said.
Reached at the office Monday, Mr. Cahill declined to comment, referring questions to Goldman’s public-relations office. He couldn’t be reached for comment Tuesday.
Mr. Cahill, a sterling trader, worked at Barclays PLC before joining HSBC in 2010, according to U.K. regulatory records. He was one of a number of unidentified HSBC traders whose conversations in electronic chat sessions were quoted by the U.K.’s Financial Conduct Authority and the U.S. Commodity Futures Trading Commission as part of their settlements with the British bank last week, according to people familiar with the chat transcripts.
The settlements, in which HSBC and five other banks were accused of trying to manipulate foreign-exchange markets to boost their own profits, resulted in the banks collectively paying about $4.3 billion. The banks didn’t dispute the regulators’ findings.
HSBC’s share of the penalties was $618 million. The bank said last week that it “does not tolerate improper conduct and will take whatever action is appropriate.” HSBC in January suspended two currencies traders in connection with the investigation.
Until now, Goldman Sachs has avoided the spotlight in the currencies-trading scandal. While at least a dozen banks suspended or fired more than 30 traders and sales people in relation to the investigation, Goldman Sachs had not taken any similar action with its staff.
Behind the scenes in recent months, Goldman was aware of Mr. Cahill’s involvement in the electronic chats and has been cooperating with British regulators, according to one of the people familiar with the matter. While Goldman isn’t under investigation, the regulators also have contacted the bank in the past few months to obtain documentation related to some of its currency traders, including Mitesh Parikh, who until leaving in September was the bank’s European head of spot foreign-exchange trading.
Mr. Parikh couldn’t be reached for comment. People familiar with the matter said in September that Mr. Parikh’s departure from Goldman was unrelated to the currencies investigation.
Documents released by the FCA showed that HSBC traders used information gathered by dealers at other firms to pick out the best time and method for conducting transactions designed to boost their profits, sometimes at the expense of their clients. The FCA also said it identified instances where HSBC foreign-exchange traders tried to make money by triggering automatic client orders to buy or sell certain currencies.
Mr. Cahill was one of the HSBC traders involved in those activities, according to two people familiar with the matter, although the precise nature of his involvement isn’t clear.
Mr. Cahill joined Goldman Sachs in October 2012, becoming vice president on the foreign exchange desk, according to a person familiar with the matter. As of Tuesday afternoon, he was still listed in the U.K.’s financial-services registry as an active employee of Goldman Sachs.