The chief executive of Switzerland's Julius Baer Group AG said
Monday the private bank has had to "clarify a few cases" of
currency trading to the country's regulator, an indication that the
global investigation of possible market manipulation has spread
well beyond the major lenders that have so far been at its
center.
Several of the world's biggest banks, including Deutsche Bank AG
and Citigroup Inc., have suspended a long list of traders since the
probe started last April. Those two banks alone facilitate just
under one-third of all currency trading.
The involvement of Julius Baer, a private bank for affluent
clients that ranks 62nd in the global currencies market, according
to the annual benchmark Euromoney survey, indicates that
regulators' interest now extends beyond the top tier.
During a presentation of bank's annual results, Chief Executive
Boris Collardi said Julius Baer has been approached regarding the
foreign-exchange probe, adding that it had to "clarify" some cases
where the bank had hired employees from larger lenders "more in
focus" in the investigation.
In a subsequent interview with The Wall Street Journal, Mr.
Collardi said the Swiss financial regulator, Finma, was the only
one to contact the bank regarding the matter. Mr. Collardi said the
regulator had inquired about "a couple of employees" who had joined
the bank from UBS and Credit Suisse, though ultimately "it hasn't
been necessary" to discipline or fire anyone as a result.
Julius Baer maintains a foreign exchange trading desk for its
private banking clients, though Mr. Collardi said he doesn't
consider the bank ranks as a market maker.
A spokesman for Finma said only that its investigation of
foreign-exchange markets was ongoing. UBS declined to comment on
the Julius Baer probe, while a Credit Suisse spokesman didn't
immediately respond to a request for comment.
In October, Finma said it was conducting probes into "several
Swiss financial institutions in connection with possible
manipulation of foreign exchange markets." That same month, in a
published interview with a Swiss media outlet, Credit Suisse
Chairman Urs Rohner said the bank had received inquiries from
regulators but hadn't found any evidence of foreign-exchange market
manipulation.
Switzerland's UBS AG, whose currencies-dealing business is one
of the biggest in the market, said in October that it had taken
disciplinary action against employees during its internal review of
its foreign-exchange business.
In January, HSBC Holdings PLC became the latest major bank to
suspend traders. Around the same time, Citigroup suspended two
more, adding to one previous firing over this issue. The growing
list of traders placed on leave clearly shows the probe is no
longer confined to a small single chat room known as "The
Cartel."
As previously reported by The Wall Street Journal, Standard
Chartered, ranked 17 in the business with a market share of about
1%, was also dragged into the investigation at the end of last year
when it suspended a trader who had recently moved to the U.K.-based
bank from UBS.
Write to John Letzing at john.letzing@wsj.com and Chiara
Albanese at chiara.albanese@wsj.com
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