South Africa Adds Names to FX Charge Roster; Releases Transcripts

South Africa’s Competition Tribunal has added five names to the list of institutions it is charging with manipulation in rand (ZAR) markets. The country’s Competition Commission has brought the charges, which were first announced in February 2017 and in turn led to one of those charged – Citi – settling with the Commission by agreeing to pay a ZAR 69.5 million fine.

The five additional names released by the Tribunal are, in reality, just an extension of the existing charges to bring in subsidiaries for the five are HSBC USA, Merrill Lynch Pierce Fenner and Smith, Bank of America N.A., Investec Bank Limited, and Credit Suisse Securities (USA).

The charges are now familiar to most FX watchers – collusion around rate fixings, the inappropriate sharing of information and attempts at market manipulation. If found guilty the banks are liable for fines of up to 10% of their annual turnover in South Africa.

Previously some of the accused institutions, most notably Investec, have criticised the case, arguing that the Commission’s case was “vague and embarrassing” and that it provided no evidence of collusion, however the latest Affadavit released last week  answers this criticism, detailing a long list of names of those traders either actively or passively involved in the alleged conspiracy as well as details of Bloomberg chat room conversations between some of those traders.

Two prominent names in the document are former Standard Chartered trader Jason Katz and former Citi trader Christopher Cummins, both of whom last year pleaded guilty in a US court to market manipulation.

In all, 36 traders are named in the report from the various organisations, however as yet, no charges have been laid against an individual in South Africa relating to these allegations.

The chat room transcripts released by the Commission cite instances of the inappropriate sharing of customer dealing intentions, agreements over skewing of prices and spreads to be quoted to certain customers, spoofing, and the triggering of stop loss orders.

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Colin Lambert

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