RC: In light of regulators’ increased focus on enforcement worldwide related to market misconduct, what trends have you observed over the last 6 to 12 months?

Bergin: There has been a marked increase in the attention paid to market manipulation by regulators around the globe. While fines from the LIBOR rate rigging scandal continued to come down in 2014, fines from new market manipulation matters have recently emerged, and new investigations continue to be opened. For example, the investigation pertaining to manipulation in the foreign exchange market has resulted in more than $5.5bn in enforcement sanctions, involving 19 separate probes and across at least 10 different countries. Also, both the DOJ and SEC have brought charges of market manipulation against separate high frequency trading firms in the past few months. Furthermore, new investigations have been opened regarding the manipulation of the precious metals markets, focusing on the price-setting process for gold, silver, platinum and palladium, with at least 10 major banks under investigation by the DOJ, FCA, FINMA and the CFTC. From this, it is clear that market manipulation is increasingly an area of concern for many regulators.

Ploener: There is a continuation of cooperation among regulators on a global basis. Additionally, after LIBOR, many of the respondents who have settled with civil and criminal authorities are required to self-report which has led to additional benchmark and collusion investigations. We expect this to continue as FX, ISDA fix and precious metals are at various stages in the investigation process. Some investigations are settling and some have entered the criminal investigation stage.

Apr-Jun 2015 Issue


KPMG Forensic