Courtesy of Pam Martens.
Troy Rohrbaugh, Head of Foreign Exchange Trading at JPMorgan
According to high priced media real estate, JPMorgan Chase and Citigroup are set to plead guilty as soon as next week to criminal charges brought by the U.S. Justice Department for colluding with other banks in the trading of foreign currencies, known on Wall Street as Forex. Guilty pleas are also expected by Royal Bank of Scotland and Barclays, while UBS, which cooperated early on in the probe, may receive a different charge.
What has not garnered any media attention, however, is the unseemly role that the perpetually blindfolded regulator, the New York Fed, has played behind the scenes as two of the nation’s largest Wall Street banks head toward becoming admitted felons.
Since January of 2014, the head of Foreign Exchange Trading at JPMorgan Chase, Troy Rohrbaugh, has served as the Chair of the Foreign Exchange Committee – a group sponsored by the New York Fed, JPMorgan’s regulator. Before Rohrbaugh became the Chair, Citigroup’s Jeff Feig chaired the Committee. (Feig left Citigroup last year to join Fortress Investment Group LLC.)
The New York Fed’s Foreign Exchange Committee looks like an antitrust train wreck in motion. Its members are the commercial banks and investment banks that compete in foreign exchange and yet they are meeting six to eight times a year to discuss the market and set “best practices” for themselves — while some are simultaneously under criminal investigation for “worst practices.”
A regular at the meetings is Simon Potter, the head of the Markets Group at the New York Fed, which also trades foreign currency and implements open market operations with the involvement of many of the same banks. Other New York Fed staffers also attend the meetings. The meetings rotate from the offices of the New York Fed to the offices of JPMorgan and other banks.
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