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Forensic investigation uncovered the extent of spot market manipulation

Member: Nifa

A statement from the Federal Bureau of Investigation (FBI) revealed this week that its Washington Field Office, in collaboration with partners abroad, particularly the UK’s regulatory law enforcement authorities, uncovered manipulation of the foreign exchange market on a massive scale. The investigation took 19 months, during which time the FBI and its partners reconstructed the fraudulent activity from a ‘sea of data’.

This included bringing together experts including special agents, forensic accountants and analysts, who took what the Bureau described as ‘the pieces of a massive jigsaw puzzle’ and assembled a picture of manipulation in an unprecedented piece of analysis.  

As Andrew McCabe, Assistant Director in Charge (ADIC) at the FBI mentioned, the investigatory team reviewed more than 680,000 pages of financial records, conducted more than 175 detailed interviews and reviewed more than a terabyte of complex bank trading data. As a result the work revealed collusion by traders, the subsequent anomalies in the market, and ultimately the bank’s culpability for this manipulation. He added that, since the crime crossed international borders, the FBI’s legal attaches in foreign countries around the world had to help to facilitate close cooperation with all these bodies and said they were a tremendous help.

The work the ADIC described is exactly what forensic accountants do on a daily basis, although not on such a scale and generally for not as long. However, each investigation will pull together records of all sorts relating to the investigation and where necessary, will conduct interviews and review other paperwork, such as emails and memos.

Author: Roger Isaacs, 22 May 2015

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