THE GLOBAL FOREIGN exchange industry's reputation has been suffering over the past year. At the start of 2003, John Rusnak, a rogue forex trader at the US unit of Allied Irish Banks, was jailed for seven and a half years. It was an unfortunate but thankfully rare example of a breakdown in trading procedures.
But the industry did not have to wait long for its next big case. Last November in New York, 47 currency traders were arrested after an 18-month undercover investigation by the FBI, dubbed Operation Wooden Nickel. Alleged offences included fraudulent schemes and other criminal offences such as money laundering, extortion and so-called points for cash.
The arrests included employees of some of the financial industry's best known firms including JPMorgan Chase, UBS and Dresdner Kleinwort Wasserstein. None of these cases has yet gone to trial but legal proceedings continue.
Any hopes of a less turbulent 2004...
