Oversight teams perform regular audits of interbank trading logs and corporate communication feeds to identify and prosecute illegal market manipulation strategies, such as Front-Running and Benchmark Rigging.
Primary FX Market Manipulation Typologies
- Front-Running: Occurs when a bank trader receives a large, confidential market order from a corporate client and executes a private trade on the same side of the market ahead of the client’s order, profiting from the artificial price movement triggered by the large corporate transaction.
- Benchmark Rigging: The illegal coordination of trading activities among market makers to artificially manipulate official fixing rates (such as the WM/Reuters London fix) to maximize trading profits at the expense of corporate clients.