Bank employees used their mobile phones and instant-messages to transmit details of impending orders to individuals working from rented trading desks in offices on the outskirts of the U.K. capital, according to three traders who said they had witnessed the practice over a period of years. The day traders then made bets on the direction of currencies and any profit was later divvied up in cash, said two of the people, who asked not to be identified because the agreements are private.
The practice shows the extent to which dealers would go to circumvent rules designed to stop them from profiting at the expense of clients, and how alleged wrongdoing in the foreign-exchange market stretched beyond the trading floors of London’s financial district to unregulated day traders in Essex and Kent…
Dealers in the U.K. are prohibited by market-abuse rules from trading on inside information and passing on confidential data about client orders to third parties, according to Janine Alexander, a lawyer at Collyer Bristow in London.
The bank scandals continue rolling in, thanks in no small part to the reporting of Bloomberg, which uncovered the alleged FX fraud back in June.
— The Wall Street Journal has a very interesting story from Swaziland, where the king’s court apparently includes executives from Coca-Cola, which accounts for about 10 percent of the country’s GDP and more than half of its exports.
Coke’s sway with Swaziland’s King Mswati III has enabled the drinks maker to secure a 6% tax rate, far below the official 27.5% corporate rate, according to a former minister who said he took part in the negotiations. “The king does everything they say,” says Sam Mkhombe, who was King Mswati III’s private secretary for seven years and traveled with him to Coke’s Atlanta headquarters in 2007…
Coke has become a cornerstone of an economy that allowed King Mswati III’s royal family to draw an allowance of $26 million from the government’s budget in 2012, according to the pro-democracy group Freedom House. Meanwhile, the World Bank says two-thirds of the landlocked country’s 1.2 million citizens live below the poverty line.
— The Journal hosted a conference in DC yesterday and got the president of the United States to show up for a sit-down with Jerry Seib, which WSJ.com live-streamed atop its homepage.
Unfortunately, I couldn’t get the video to quit crashing. Maybe the Journal will ease up on healthcare.gov now.