UPDATE 2-HSBC, Citi suspend traders as FX investigation intensifies

(Corrects spelling of dealer name in paragraphs 7 and 8)

By Steve Slater and Clare Hutchison

LONDON, Jan 17 (Reuters) – HSBC and Citigroup (TLO:CIT-U.TI – News) suspended both currency traders on Friday as global investigations into possible manipulation in the foreign exchange market intensified.

Regulators from the United States arrived in London this week, intensifying an investigation as they work with Britain’s financial regulator to find out whether traders from some of the world’s largest banks colluded to exploit the $5.3 trillion-a-day foreign exchange market to manipulate.

The investigation focuses on senior traders’ communication of client positions through electronic chat rooms, which also played a key role in an investigation into the manipulation of a key interest rate called the London Interbank Offered Rate (Libor).

As currency investigations become more intense, banks themselves are taking a closer look at their employees and most of them are now conducting internal investigations.

Sources told Reuters that Deutsche Bank (Xetra: DBK.DE – News) suspended several traders in New York (Frankfurt: HX6.F – News) this week, while U.S. regulators raided the London offices of Citigroup (NYSE: C – News). News) attacked .

An HSBC spokesman confirmed that the bank had suspended two currency traders in London but declined to comment further.

The two suspended HSBC traders are Serge Sarramegna and Edward Pinto, a person with direct knowledge of the situation said. The two men could not immediately be reached by phone or email.

Their positions were not known, although Sarramegna has headed the G10 Spot FX desk in the past. Both are listed as active on the UK regulator’s register of financial services employees.

A Citigroup spokesman said two foreign exchange traders had been “placed on leave.” One dealer works in London and the other in New York, two people familiar with the matter said.

Several traders at several banks were suspended or placed on leave. Citi fired its head of European spot foreign exchange trading, Rohan Ramchandani, last week after he was on an extended leave of absence, a source familiar with the matter said.

Deutsche Bank, Citi and HSBC are three of the biggest players in the forex market.

Britain’s Financial Conduct Authority launched a formal investigation into the foreign exchange market in October, and the U.S. Department of Justice is also investigating possible manipulation.

The FCA is focusing on around 15 banks that it has asked for or obliged to provide information about foreign exchange trading activities. (Reporting by Steve Slater and Clare Hutchison; Editing by Sophie Walker)