Month: March 2014

Probe Launched into Forex by Australian Regulators

Australia is the most recent country to begin investigations into its foreign exchange market, which recently stood at $168bn. Investigators are currently investigating whether some larger banks and private traders are engaging in price-rigging and other types of misconduct that might artificially drive up the market. Probes such as this have already been launched throughout parts of Asia and Europe, as well the U.S.

Did Price Rigging Take Place?

While no official allegations have been made against any bank or private trader, Aussie regulators have begun to look into the possibility that both price rigging and private information about the market that could eventually shift foreign exchange in a controlled direction.

Greg Medcraft

Greg Medcraft

The Australian Securities and Investment Commission (ASIC) reports that the inquiry may not be complete for over a year, due to the corporations and the number of companies involved. ASIC chairman Greg Medcraft asserted that “We are commencing a review to ascertain whether any misconduct relating to foreign exchange trading may have occurred in Australia.” Medcraft went on to say that he’s unsure whether or not ASIC has reason to be concerned, but that there is enough evidence to launch the probe, especially with some of the inconsistences that monitoring has turned up recently, and that they are cooperating with other regulators who are performing their own investigations in other countries in order to expedite the process.

Probe is Still in Early Stages

The foreign exchange market is one of the largest global trading sectors in the world, and although the probe that was launched by ASIC has just begun, Medcraft and others suspect that the investigation will result in both private traders and banks in Australia being flagged and punished with massive fines, as other countries have uncovered wrongdoing in their own forex markets in the past.