Goldman Sachs Said to Ban Multibank Chats

Amid regulator probes into manipulation of benchmark interest rates and FX rates, Goldman Sachs has reportedly banned traders from using chat rooms with counterparts at more than one bank.

Goldman Sachs Group Inc. followed competitors in banning traders from using chat rooms involving counterparts at more than one bank as regulators probe alleged currency rigging, said a person with knowledge of the matter.

Traders will still be allowed to communicate one-on-one with dealers at other firms to discuss business, said the person, who asked not to be identified because the decision hasn’t been made public. Fiona Laffan, a spokeswoman for the New York-based firm, declined to comment on the move.

Banks are clamping down on traders’ use of chat rooms after regulators used them as evidence in their investigations into the manipulation of benchmark interest rates and foreign-exchange rates. JPMorgan Chase & Co., Royal Bank of Scotland Group Plc, and Lloyds Banking Group Plc prohibited multidealer chat rooms this week. Deutsche Bank AG will widen a ban on such forums to include its entire investment bank and transaction-banking business.

Goldman Sachs said in November it’s under investigation by regulators probing foreign-exchange rates and is cooperating with those inquiries. Goldman Sachs, JPMorgan, and Deutsche Bank are among almost a dozen firms that are reviewing millions of e-mails, instant messages, and phone records of their foreign-exchange employees for evidence of potential manipulation, people with knowledge of those probes have said.

Bloomberg News reported in June that currency dealers said they had been front-running client orders and attempting to rig foreign-exchange rates by colluding with counterparts and pushing through trades before and during the 60-second windows when key benchmarks, such as the WM/Reuters rates, are set. They would share details of orders with brokers and counterparts at banks through instant messages to align their strategies, two of the people said at the time.

Traders may communicate on platforms provided by Bloomberg LP, the parent of Bloomberg News, Thomson Reuters Corp., or private networks.

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