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EU Turns to Facebook Messages for FX-Rigging Evidence

European Union regulators are investigating messages by foreign-exchange dealers on Facebook Inc. as they widen their probe into allegations of malpractices by banks past instant messages and work e-mails.

All the banks involved have been requested to avail all communications between dealers, with social media not being left out. This is because the EU is suspicious that some online messages and e-mails were deleted in order to wipe out any evidence that traders were unscrupulously exchanging information.

 “It’s a very important case because the forex markets every day exchange billions and billions of euros,” Bloomberg TV quoted EU antitrust chief Joaquin Almunia as saying in September. “Regulators have got some contributions from people that warned us of the possibility of collusion.”

However, not every bank that is included in the EU’s investigation has been requested to avail more communication details between FX dealers besides instant messages and work e-mails. Banks thought to be involved in the probe include Citigroup, HSBC, JP Morgan & Chase Co., Barclays, UBS, Royal Bank of Scotland and Deutsche Bank.

Estimates by Citigroup analysts in early October pegged potential fines that banks found guilty of FX malpractices will pay at a total of $41 billion. So far, JPMorgan, RBS and Deutsche Bank are some of the banks that have tightened chatroom use as watchdogs comb messages for any evidence that dealers conspired to manipulate benchmark rates or currencies.

When contacted by Bloomberg News, representatives of Barclays, Deutsche Bank, the European Commission, UBS, Citigroup and RBS refused to comment as well as Facebook spokespersons. HSBC and JPMorgan were unavailable to comment by the time of the publication.

 

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