Remarks by ADIC Andrew McCabe at Press Conference on Foreign Exchange Spot Market Manipulations
Thank you. Good morning. My name is Andrew McCabe. I am the assistant director in charge of the FBI’s Washington Field Office. As the Attorney General has explained, today’s resolution represents the results of a 19-month investigation into manipulation of the foreign exchange market. The criminality occurred on a massive scale as individual traders at the bank communicated in code in exclusive chat rooms to set price fixing on a daily basis. Simply put, the activities of these traders undermined transparent market-based exchange rate that serves as a critical benchmark to the world economy. Consumers, including companies, large corporations, investment firms, pension funds base their financial decisions on this market and ultimately made those decisions based on rigged rates.
The foreign exchange market is largely decentralized and is lightly regulated. So with no central transactional exchange, the FBI was forced to reconstruct the fraudulent activity from a sea of data. This was a monumental task. In order to recreate the price fixing, the Washington Field Office brought together experts in fraud investigations, including special agents, forensic accountants and analysts. We essentially took the pieces of a massive jigsaw puzzle and assembled a picture of manipulation. This type of analysis in the foreign exchange market by law enforcement is unprecedented.
In close coordination with prosecutors and regulators, the 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 the collusion by traders, the subsequent anomalies in the market, and ultimately the bank’s culpability for this manipulation. This crime crossed international borders and demanded that we, too, crossed jurisdictions to closely coordinate with partners abroad, particularly the United Kingdom’s regulatory law enforcement authorities. Our legal attaches in foreign countries around the world helped facilitate this close cooperation and for that assistance we are grateful.
This investigation shows that the FBI can and will continue to investigate the most sophisticated criminal activity. The advances in digital analysis developed by this team are now used as a model by other FBI agents around the country working on similar complex cases. At its core, the case comes down to the criminal activity of a few individuals at some of the world’s largest banks who manipulated the market for their own personal benefit. No level of criminal activity, no matter how complex, is beyond the reach of the FBI to investigate and bring those responsible to justice.
I’d like to personally thank all the members of the investigative team at the Washington Field Office for their diligence and perseverance in seeing this case through. I’d also like to thank our partners, first and foremost at the Department of Justice, and also the men and women of the CFTC (Commodity Futures Trading Commission), the SEC (Securities and Exchange Commission), and also the Federal Reserve for their incredible assistance and cooperation in this matter.
Now I’d like to turn over to Director Aitan Goelman of the Commodity Futures Trading Commission’s Division of Enforcement. Thank you.