The U.S. Justice Department is “aggressively investigating” possible manipulation of foreign exchange rates by a number of banks, Deputy Attorney General James Cole said.

Cole made the remarks today in a speech to compliance officers and investigators at a money-laundering enforcement conference in Washington, where he touted the department’s investigation of manipulation of the London interbank offered rate, or Libor, the benchmark interest rate for more than $360 trillion of securities worldwide.

“The department’s criminal and antitrust divisions along with the FBI, regulators and other law enforcement agencies around the world are aggressively investigating possible manipulation of foreign-exchange rates involving a number of financial institutions,” Cole said at the conference sponsored by the American Bar Association and the American Bankers Association. “You’ll be hearing more about this investigation in the future.”

Regulators in the U.K., Switzerland, the U.S. and Asia are probing allegations of rate-rigging in the $5.3 trillion-a-day currency market. Dealers in the industry were front-running client orders and attempting to rig the benchmark WM/Reuters rate by colluding with counterparts and pushing through trades before and during the 60-second windows when the benchmarks are set, Bloomberg News reported in June.

Eight Banks

At least eight banks, including Citigroup Inc. (C:US) and JPMorgan Chase & Co. (JPM:US), have said they are cooperating with authorities investigating the foreign-exchange market. Citigroup, JPMorgan and Barclays Plc have suspended or put on leave some senior currency traders amid the inquiry. No one has been accused of wrongdoing.

Regulators around the world are examining alleged abuses of financial benchmarks by companies that play a central role in setting them. The Justice Department’s probe of Libor rigging found that the manipulations weren’t isolated incidents involving rogue traders, Cole said.

“During our investigation it became apparent that certain institutions condoned a culture of illegal behavior,” he said. ‘It was this culture that led the department to investigate and prosecute not just the individuals engaged in Libor manipulation but the institutions that condoned it.’’

Cole said the U.S. Libor probe has led to criminal charges against five individuals and resulted in more than $3.7 billion in penalties paid to law enforcement and regulatory agencies.

“This may be only the beginning because our investigation of Libor is still ongoing,” he said.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.