Goldman Faces New Forex Rigging Suit From Currency Trader
Richard Crump, 12 March 2021
Goldman Sachs is being sued in London over allegations that its traders manipulated foreign exchange markets for profit, in the latest lawsuit filed by a British currency investment firm over trade front-running.
ECU Group alleges that traders at Goldman Sachs International misused its confidential information to make secret profits by trading ahead of foreign exchange transactions by the British company, an illegal tactic known as front-running, according to the High Court claim filed in November but only recently made public.
ECU, which helps companies manage debt in multiple currencies, is seeking damages, which have not been specified, for losses it says correspond to the wrongful profits Goldman made from so-called stop-loss orders — which directed the bank to trade with ECU when the currency hit a certain price — when providing forex services between 2007 and 2010.
U.S. regulators fined Goldman $110 million in 2018 for allegedly operating its foreign exchange trading business under lax controls that allowed traders to swap private client information in online chat rooms with competitors and inflate their profits.
ECU said in its claim that it “now reasonably infers that the bank’s systematic misconduct included market price manipulation and misuse of confidential information and trade secrets in respect of ECU stop-loss and limit orders, given the nature, size, frequency and duration of trading conducted by the bank on behalf of ECU.”
