Banks under investigation for currency rate-rigging were told to record all questioning of employees and hand them over to investigators, as the U.K. markets regulator seeks to prevent interference with the probe, according to four people with knowledge of the case.
Bloomberg reports that the U.K. Financial Conduct Authority sent letters to the banks about six weeks ago, outlining how they should conduct internal interviews, according to the people, who asked not to be named because the discussions are private.
It’s a stricter approach than the FCA took previously. The regulator allowed finance firms targeted in global investigations like the one into manipulation of the London interbank offered rate, or Libor, to conduct reviews mostly independently. Some of the banks’ lawyers say it is a breach of attorney-client privilege, three of the people said.
'A regulator should not be dictating how companies conduct their own internal investigations, even if there is an expectation that the results of the internal investigation may be turned over to regulators or law enforcement at some point'. said Jacob S. Frenkel, a lawyer and former federal prosecutor.
The FCA opened a formal probe of currency-rate trading in October amid allegations the $5.3tril-a-day market was manipulated. The U.S. and Switzerland have also opened investigations and the European Union is considering one.
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