BP denies inappropriate currency trading by its dealers

LONDON Tue Mar 11, 2014 4:03pm GMT

BP's logo is seen on one of its corporate sponsor pavilions in the Olympic park, in Stratfod, east London, July 19, 2012. REUTERS/Andrew Winning

BP's logo is seen on one of its corporate sponsor pavilions in the Olympic park, in Stratfod, east London, July 19, 2012.

Credit: Reuters/Andrew Winning

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LONDON (Reuters) - British oil company BP said none of its currency traders had engaged in inappropriate trading activity, after a media report alleged one of them had received information from a dealer at Lloyds Banking Group.

Allegations of possible manipulation of the $5.3 trillion-a-day (£3.18 trillion) foreign exchange market have so far centred on major banks.

Financial regulators and monetary authorities around the world are looking into allegations that traders colluded to manipulate benchmark exchange rates, a cornerstone of global markets that are used as reference rates by companies, investors and central banks.

Bloomberg News reported earlier on Tuesday that Martin Chantree, a senior foreign exchange dealer at Lloyds, shared information with a forex trader at BP on January 31 2013 about an impending order from a client to sell 300 million pounds for dollars.

Chantree has been suspended from the partly state-owned bank, Reuters reported on February 4.

Chantree, who has not been accused of any wrongdoing by authorities, did not respond to messages Reuters left at a phone number listed in his name and sent via LinkedIn on Tuesday.

Many people active in the foreign exchange markets say that sharing information with other players is a vital element that allows banks and others to manage the risk they take on when agreeing to fulfil orders for clients and their own needs.

Indeed, industry body the ACI says that banks must be allowed to share details of their overall position with others, but differentiate between that and either cartel-like collusion to move the market or the breaking of confidentiality agreements with particular clients by sharing details of their orders, both of which go against the ACI code of conduct.

BP, Europe's second-biggest oil company by stock market value, denied any wrongdoing.

"We carried out a detailed investigation into this allegation, including examining communication on messaging systems and phone, and trading activity," a BP spokesman said.

"Based on this detailed investigation, we strongly refute any suggestion that any BP FX traders engaged in inappropriate trading activity in this market. BP's trading activity in the market was fully compliant and in line with regulations, BP's code of conduct and BP's trading-specific requirements," the spokesman said.

Major commodity producers, such as oil companies and miners, need to be involved in foreign exchange markets to hedge risks associated with producing in one currency and selling in others.

BP employs four traders who buy and sell currencies for this reason as well as trading to enhance profits from its main oil and gas business.

British bank Lloyds said it was investigating the matter. "We take individual allegations of this nature very seriously and we immediately launched an investigation into the specific allegations raised," a Lloyds spokesman said.

"The investigation is ongoing and at this stage it would be inappropriate to speculate on its outcome."

A spokesman for Britain's Financial Conduct Authority, which is investigating allegations of collusion between traders at banks to manipulate key exchange rates, said it was too early to say whether there would be any regulatory probe of BP.

More than 20 traders at several of the world's biggest banks have so far been placed on leave, suspended or fired as a result of the various probes. Last week, the Bank of England suspended an employee as part of its internal investigation.

No-one has been charged with wrongdoing by authorities.

(Reporting by Jamie McGeever and Matt Scuffham; Editing by Erica Billingham and Alexander Smith)

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