By Chiara Albanese
LONDON-- Goldman Sachs Group Inc., which wasn't punished in last
week's foreign-exchange-manipulation settlements with U.S. and
British regulators, has ousted a currencies trader who allegedly
was involved with the misconduct before he joined the firm.
Frank Cahill, who joined Goldman Sachs in 2012 as a currencies
trader after working at HSBC Holdings PLC, was asked to leave
Goldman's London offices on Tuesday as a result of his alleged
involvement in the currencies-rigging affair, according to a person
with the matter.
"This relates to a period before he joined Goldman Sachs and he
has now left the firm," a Goldman Sachs spokeswoman said.
Reached at the office Monday, Mr. Cahill declined to comment,
referring questions to Goldman's public-relations office. He
couldn't be reached for comment Tuesday.
Mr. Cahill, a sterling trader, worked at Barclays PLC before
joining HSBC in 2010, according to U.K. regulatory records. He was
one of a number of unidentified HSBC traders whose conversations in
electronic chat sessions were quoted by the U.K.'s Financial
Conduct Authority and the U.S. Commodity Futures Trading Commission
as part of their settlements with the British bank last week,
according to people familiar with the chat transcripts.
The settlements, in which HSBC and five other banks were accused
of trying to manipulate foreign-exchange markets to boost their own
profits, resulted in the banks collectively paying about $4.3
billion. The banks didn't dispute the regulators' findings.
HSBC's share of the penalties was $618 million. The bank said
last week that it "does not tolerate improper conduct and will take
whatever action is appropriate." HSBC in January suspended two
currencies traders in connection with the investigation.
Until now, Goldman Sachs has avoided the spotlight in the
currencies-trading scandal. While at least a dozen banks suspended
or fired more than 30 traders and sales people in relation to the
investigation, Goldman Sachs had not taken any similar action with
its staff.
Behind the scenes in recent months, Goldman was aware of Mr.
Cahill's involvement in the electronic chats and has been
cooperating with British regulators, according to one of the people
familiar with the matter. While Goldman isn't under investigation,
the regulators also have contacted the bank in the past few months
to obtain documentation related to some of its currency traders,
including Mitesh Parikh, who until leaving in September was the
bank's European head of spot foreign-exchange trading.
Mr. Parikh couldn't be reached for comment. People familiar with
the matter said in September that Mr. Parikh's departure from
Goldman was unrelated to the currencies investigation.
Documents released by the FCA showed that HSBC traders used
information gathered by dealers at other firms to pick out the best
time and method for conducting transactions designed to boost their
profits, sometimes at the expense of their clients. The FCA also
said it identified instances where HSBC foreign-exchange traders
tried to make money by triggering automatic client orders to buy or
sell certain currencies.
Mr. Cahill was one of the HSBC traders involved in those
activities, according to two people familiar with the matter,
although the precise nature of his involvement isn't clear.
Mr. Cahill joined Goldman Sachs in October 2012, becoming vice
president on the foreign exchange desk, according to a person
familiar with the matter. As of Tuesday afternoon, he was still
listed in the U.K.'s financial-services registry as an active
employee of Goldman Sachs.
Write to Chiara Albanese at chiara.albanese@wsj.com
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