BP carries out review into possible forex link

The company has been conducting their own inquiry whether any link existed. Picture: Getty

OIL major BP faces being entangled in the foreign exchange (forex) rigging scandal after it emerged that it has been investigating whether its traders were linked to the manipulation of the £3 trillion-a-day market.

The company confirmed yesterday that it had carried out a review of its activities after worldwide regulatory inquiries that led to six banks being fined a total of £2.6 billion last month for manipulating the market.

Details emerged after it was reported that members of a BP trading unit were told of planned currency trades hours before they happened.

News service Bloomberg said it had seen copies of messages sent to the oil giant’s staff from firms whose senior forex traders belonged to a chatroom known as “The Cartel”.

However, there was said to be no evidence that any BP traders were members, or that anyone at the oil firm acted on information given to them.

BP said in a statement: “Following regulatory market (not into BP) investigations regarding the foreign exchange markets, we conducted a review into our activities in this area.

“BP’s foreign exchange desk has relationships (as a customer) with 26 relationship banks, including JP Morgan Chase, Citibank and Barclays.”

The statement added that the company had a “robust framework” of compliance requirements and internal controls that were constantly reviewed, and maintained an open dialogue with regulators.

“BP’s code of conduct includes mandatory requirements for employees to disclose potential conflicts of interests internally. Following such disclosure, steps are taken to manage and monitor these appropriately,” it said.

The group has declined to discuss the internal reviews further.

Royal Bank of Scotland was fined £399 million as part of the investigations into forex market rigging by UK, US and Swiss regulators, which included a £217m fine by Britain’s Financial Conduct Authority (FCA).

Another major UK clearer, HSBC, got total fines of £389m, including £216m by the FCA. Major US banks JP Morgan and Citibank were both among those also fined, while UK lender Barclays, though yet to finalise a settlement with regulators, has set aside £500m over the affair.

The UK forex market – partly through its advantageous half-way time zone between America and Asia – is larger than the US/Japan currency market combined.

• BP confirmed yesterday that Iain Conn, an executive director, has stepped down. Conn is joining Scottish Gas-owner Centrica as its new chief executive in place of the long-serving Sam Laidlaw.

BP also announced that Paul Anderson, a non-executive ­director at the group, stepped down yesterday as a non-­executive at UK defence giant BAE Systems.

SUBSCRIBE TO THE SCOTSMAN’S BUSINESS BRIEFING

• Get the latest business headlines from a variety of news sources emailed to your inbox each morning