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U.S. contacts UK FX trader over Bank of England meeting - source
May 14, 2015 / 3:00 AM / 3 years ago

U.S. contacts UK FX trader over Bank of England meeting - source

London (Reuters) - The U.S Department of Justice has requested an interview with a senior London-based currency trader who attended a meeting with Bank of England officials three years ago that ultimately became pivotal to a global investigation into allegations of market collusion and manipulation, a source familiar with the matter said on Wednesday.

The Bank of England is seen through columns in the City of London, Britain April 28, 2015. REUTERS/Neil Hall

The trader, James Pearson, head of Royal Bank of Scotland’s (RBS.L) European forex trading, is not under investigation, according to the source, and is still employed at RBS.

The Financial Times reported earlier that the DOJ's request to interview Pearson was made secretly and that UK authorities were not informed. (

The FT reported that U.S. authorities are concerned over the thoroughness of a Bank of England (BoE) investigation into whether any of its staff was aware of or condoned currency market manipulation, citing people it said were familiar with the situation.

Pearson attended a pivotal meeting in April 2012 of the BoE’s chief currency dealer Martin Mallett and other chief dealers in London.

Pearson is one of the few senior FX market figures who attended these regularly scheduled meetings with BoE officials who is still employed by the same bank and who was not suspended or fired amid the global probe.

The April 2012 meeting became a central focus of a global investigation into allegations of market manipulation that resulted in six banks paying $4.3 billion in fines late last year. Several banks are expected to reach a multibillion-dollar settlement with U.S. authorities as soon as next week.

Traders at that meeting raised the issue of sharing client order information at the daily currency fixings with the BoE officials present. Pearson lodged his account of the meeting shortly after that with the UK market regulator, the Financial Conduct Authority, the source said.

Last year, the BoE’s supervisory board commissioned an investigation by a top commercial lawyer, Anthony Grabiner, to look into what BoE staff knew about foreign exchange market malpractice.

Mallett was fired after the investigation criticised his handling of suspicious market practices and found that he had failed to escalate concerns that traders at other banks were possibly colluding to manipulate parts of the $5-trillion-a-day global market, which is centred in London.

But the report also said Mallett did not act in bad faith.

A BoE spokesman repeated governor Mark Carney’s remarks to UK lawmakers on March 3 that the Grabiner report was “thorough and comprehensive” and that he had “free rein to investigate absolutely anything he needed to, and he had unlimited resources to do this.”

Peter Carr, a spokesman for the U.S. Justice Department, did not immediately respond to a request for comment.

The FCA was not immediately available for comment.

Additional reporting by William Schomberg in London and Karen Freifeld in New York; Editing by Ted Botha

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