NY State investigators think Feds missed the bulk of big banks' forex rigging

Banks Probed Over Automated Forex Deals

Gina Chon and Ben McLannahan
Financial Times, London
Friday, May 22, 2015

Wall Street banks are facing the threat of new and more damaging allegations about their rigging of foreign exchange markets, as New York's banking regulator intensifies a probe into computer-driven currency trading -- raising the prospect that the total penalties arising from the scandal will exceed the $10 billion already paid.

The New York Department of Financial Services, run by Benjamin Lawsky, has become increasingly convinced that banks have been systematically abusing forex markets through the use of automated trades driven by computer algorithms, according to people familiar with its investigation.

Findings from the probe may indicate more widespread market abuse than US and UK authorities disclosed on Wednesday, when detailing their settlement with six global banks, the people added. They pointed out that this $5.6 billion settlement related to allegations of market manipulation by bank employees -- but Mr Lawsky's probe covers electronic trading, which accounts for the majority of forex transactions. ...

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http://www.ft.com/intl/cms/s/0/092572d2-0005-11e5-abd5-00144feabdc0.html