DealBook: Commerzbank Suspends Two Currency Traders

LONDON – The German lender Commerzbank has suspended two currency traders, becoming the latest bank to place employees on leave as investigations into potential manipulation of the $5-trillion-a-day currency markets widen.

The bank confirmed on Wednesday that it had suspended two traders in its foreign exchange business after discovering a breach of its internal rules.

"Commerzbank has zero tolerance for non-compliance with rules and regulations, and has taken immediate action upon the discovery of inappropriate conduct," a spokesman for Commerzbank's Corporates & Markets business said. "We believe this incident was an isolated event and one from which the bank and the individuals concerned in no way profited."

The bank didn't identify the traders.

The suspensions are the latest escalation of a series of regulatory and internal investigations that are examining whether traders at some of the world's largest banks colluded to improperly influence the foreign exchange markets.

Regulators in Britain, the United States, Germany and other countries have all begun investigations into whether traders tried to manipulate closely watched benchmark currency rates.

In March, Switzerland's Competition Commission said that it had begun a formal investigation into eight financial institutions, including the Swiss banks Credit Suisse and UBS, over potential collusion to manipulate the currency markets.

Earlier this week, the Federal Financial Supervisory Authority of Germany said it found evidence that traders attempted to manipulate multiple currencies. The regulator didn't name any banks or individuals and has brought no charges in the matter.

More than two dozen traders have been placed on leave or fired on four continents as a result of internal investigations at several large financial institutions involved in foreign exchange trading, including Barclays, JPMorgan and Royal Bank of Scotland.

Deutsche Bank, the largest player in the currency trading market, with a share of about 15 percent, and Citigroup have each fired employees as a result of their own investigations.

The Bank of England has also suspended an employee as it conducts an internal review into whether central bank officials knew of, or condoned, manipulation of the currency markets.

Neither the banks nor any of the suspended or fired traders have been accused of wrongdoing by the authorities.

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