The forex rigging scandal was a series of investigations, starting in 2013, into traders at major banks who shared confidential client information and coordinated their trading in private online chat rooms, in some cases to move a key benchmark exchange rate in their favour. Regulators in the US, UK, Switzerland and the European Union fined the banks billions of dollars from 2014 onwards, and in 2015 four banks pleaded guilty to criminal charges in the US. One chat room's members called themselves "The Cartel".

For ordinary traders the case explains why benchmark rates and execution rules are now so tightly regulated, and why you should understand how your own orders are filled.

What was targetedBenchmark rates, mainly the WM/Reuters 4pm London fix
HowSharing client orders and coordinating trades in chat rooms
First big finesNovember 2014, about $4.3 billion across regulators
Guilty pleasMay 2015: Citicorp, JPMorgan, Barclays, RBS
EU cartel fines2019 and 2021

What a currency fix is

Many investors need an agreed exchange rate at a set time, for example to value a pension fund's foreign holdings at the end of the month. The most widely used benchmark was the WM/Reuters rate set at 4pm London time, based on trades during a short window around that moment. Fund managers often asked banks to buy or sell currency for them "at the fix", which meant the bank promised the client that rate and then had to trade around 4pm to cover the order.

That created a conflict. A trader who knew a large client order was coming at the fix, and who could coordinate with traders at other banks holding similar orders, could try to push the rate during the window to make money on the difference.

Inside the chat rooms

Regulators' published findings quote from multibank chat rooms with names such as "The Cartel", "The Bandits' Club" and "The Mafia". Traders shared details of their clients' orders, agreed who would trade when, and tried to build or offload positions ahead of the fix so the rate moved their way. They also coordinated against stop-loss orders, pushing prices towards levels where clients' stops would be triggered.

How the fix was manipulated1Share ordersTraders told rivalsabout their clients'orders at the fix2Pool positionsThey agreed who wouldtrade, concentratingbuying or selling3Push the windowHeavy trading in thefix window moved thebenchmark4ProfitTheir own positionsgained, often atclients' expenseSource: CFTC, FCA and US Department of Justice findings, 2014–2015fxrecap.com
Benchmarks used by millions were nudged by a small group of traders.

Regulators found misconduct by banks and their traders; individual criminal cases have had mixed results. In 2018, for example, a US jury acquitted three former London traders. Only describe a named person as guilty where a court has found them so.

The fines

In November 2014 the US Commodity Futures Trading Commission, the UK's Financial Conduct Authority and Swiss and US banking regulators announced penalties against several banks totalling about $4.3 billion. The CFTC's share was $1.4 billion, and the FCA fined five banks about £1.1 billion, at the time the largest fines in its history.

In May 2015 the US Department of Justice went further. Citicorp, JPMorgan Chase, Barclays and the Royal Bank of Scotland pleaded guilty to conspiring to manipulate currency prices, and together with UBS the banks agreed to pay about $5.6 billion. The Justice Department said total penalties across the currency investigations came to about $9 billion. Later the European Commission fined banks about €1.07 billion in 2019 and about €344 million in 2021 for operating FX trading cartels, with UBS avoiding a fine in 2021 because it reported the cartel.

Selected forex rigging penaltiesApproximate, US$ billionUS DOJ settlements, May 2015≈$5.6bnRegulators, Nov 2014≈$4.3bnEU cartel fine, 2019≈$1.2bnEU cartel fine, 2021≈$0.4bnSource: US DOJ, CFTC, FCA and European Commission announcements; roundedfxrecap.com
Penalties ran into the billions across several regulators.

What changed in the market

  • A wider fix window. After recommendations from the Financial Stability Board, the 4pm fix window was widened from one minute to five in 2015, making it harder to push the rate.
  • Chat rooms were shut down. Banks banned or restricted multibank chat rooms and recorded and monitored traders' communications.
  • The FX Global Code. Central banks and market participants published a code of conduct in 2017 on information sharing, execution and "last look".
  • Personal accountability. The UK's Senior Managers and Certification Regime made named executives responsible for conduct in their areas.
The fix, before and afterBeforeAfterOne-minute windowFive-minute windowOpen multibank chat roomsMonitored communicationsClient orders shared freelyGlobal Code limits on sharingSource: FSB recommendations, 2014; FX Global Code, 2017fxrecap.com
Reforms made benchmark manipulation harder and easier to detect.
Illustrative case: a pension fund's fix order

Suppose a pension fund asked its bank to buy 500 million euros against the dollar at the 4pm fix. If traders who knew about such orders bought euros ahead of time and kept buying into the window, the fix might be set a few pips higher than it otherwise would. On 500 million euros, every pip costs the fund about $50,000. Spread across many orders and many months, small nudges added up to large costs for savers who never saw them.

Why the scandal took so long to surface

The forex market had no central exchange and little direct regulation of spot trading, which was treated as a professional market between banks. Communication between dealers at different banks was normal and often useful, because traders needed to know where prices were. Over time the line between sharing market colour and sharing confidential client orders became blurred, and the chat rooms turned into a place where that line was crossed routinely.

The investigations began after the Libor interest rate scandal had shown how benchmarks could be manipulated. Journalists reported suspicious patterns around the 4pm fix in 2013, and regulators requested chat logs from the banks. The written records of traders boasting about moving the fix provided much of the evidence. Many traders were suspended or dismissed, and some later challenged their dismissals or the cases against them.

What it means for retail traders

Retail traders were rarely the direct targets, but the scandal is a reminder that the price you trade at depends on what liquidity providers do. Today's rules mean brokers must explain how orders are executed, and many publish execution statistics. If a broker repeatedly fills your stops at the extreme of a spike, ask questions and compare execution with other firms. Our guide to requotes, slippage and off quotes explains what is normal.

Lessons

  • Benchmarks can be gamed when a few players know where the big orders are.
  • Stop clusters attract attention. Obvious levels where many traders place stops can be targeted, so avoid placing yours exactly at round numbers.
  • Execution quality matters. Read your broker's order execution policy and watch how your orders are filled.
  • Regulation exists for a reason. Most of today's rules on conduct and transparency trace back to scandals like this one.

Learn how stops and limits are filled in forex order types, and why liquidity clusters around obvious levels in our liquidity sweep guide.

Cite this guide

FX Recap, "The Forex Rigging Scandal: 'The Cartel' and Billions in Fines", updated 12 November 2026, https://fxrecap.com/learn-forex/education/forex-rigging-scandal

Free to quote with a link. Journalists: data and comment in our press room.

Frequently asked

What was the forex rigging scandal?

Investigations from 2013 found that traders at several large banks shared client order information and coordinated trading in private chat rooms, in some cases to move benchmark exchange rates such as the 4pm London fix. Regulators fined the banks billions from 2014 onwards.

Which banks were fined for forex rigging?

Fines were imposed on banks including Citigroup, JPMorgan, Barclays, Royal Bank of Scotland, UBS and HSBC, among others. In May 2015 Citicorp, JPMorgan, Barclays and RBS pleaded guilty to US criminal charges.

How much were the banks fined?

About $4.3 billion across regulators in November 2014, about $5.6 billion in the US settlements of May 2015, and further EU cartel fines in 2019 and 2021. The US Justice Department put total penalties across the currency investigations at about $9 billion.

What was "The Cartel" chat room?

One of several multibank online chat rooms described in regulators' findings, where traders from different banks shared information and coordinated trades. Others had names such as "The Bandits' Club" and "The Mafia".

Were any traders jailed for forex rigging?

Criminal cases against individuals have had mixed results. In 2018 a US jury acquitted three former London traders. Most of the penalties fell on the banks themselves rather than on individuals.

Can retail traders be affected by benchmark manipulation?

Mostly indirectly. Retail orders are not usually tied to the 4pm fix, but anyone whose pension or fund converts currency at a benchmark rate could pay slightly more. The reforms since 2015 make that kind of manipulation much harder.

How was the forex fix changed?

The 4pm WM/Reuters fix window was widened from one minute to five in 2015, banks restricted chat rooms and monitored communications, and the industry adopted the FX Global Code of conduct in 2017.