The headline here isn't a promotional slogan for the next terribly made but cunningly PR-ed Bollywood potboiler. Those are the names keeping financial sector regulators from "Washington to Bern" busy these days. A recent Bloomberg report brought to the fore the stunts of international currency traders in London.
One Team, etc, are the chatrooms traders created using a facility on the ubiquitous Bloomberg terminals. These were used by influential traders to exchange confidential information, including each other's entire order books, to enable them to maximise profits for their banks, resulting in hefty bonuses.
Traders allegedly used these tools to rig exchange rates of various currencies that fixed during a 30-second span every trading at 4 pm. Funnily, the entire operation spilled out accidentally and has since triggered multiple agency investigations across continents.
The idea that even in the numero uno international financial centre at the heart of the most developed market in the world, traders rely on inside information is humbling and confirms my worst fears about the market system we all owe our existence to.
A few years earlier, when I used to track index movements on a daily basis, I would hear from sundry traders about how some big hands wanted Nifty futures for a particular series to close above a particular level for the expiry. And, how they might spike up a particular index heavyweight to achieve this end. Similarly, they could beat down stocks to ensure the index closed below a certain level.
Any enquiries about who these strong hands were often led to dead ends. I was also told by highly regulated players such as fund managers that Indian markets were deep enough and a few people could not control or dictate trades at the index levels, though even they conceded that manipulation at the level of individual scrips on shallow counters were rampant.
Now, I wonder if these strong hands used such tools to exchange sensitive information and fix indexes. If multi-trillion dollar currency market rates can be fixed by a handful of traders, can the much smaller Indian stock market be an exception?
Further, it is reported that many influential currency traders who worked in different banks stayed in the same neighbourhood and often had each other's company for fishing trips and weekend parties. It is not uncommon to see cash packets exchanged during these parties, according to the Bloomberg report. Indian traders might not be fond of fishing trips, but there are always weddings and dandiyas.
Intermediaries have got used to the investigation process and check posts over the past two decades. There has not been much change in the way investigators track the insiders and try to establish patterns of trading, etc.
So, if regulators continue to go down the beaten path, what are their chances of cracking big cases? Should we be at the mercy of an accidental, lucky breakthrough? I am not going to bore you by repeating our unenviable record in catching offenders and bringing them to justice. Let us wait for Sebi to surprise us.
One Team, etc, are the chatrooms traders created using a facility on the ubiquitous Bloomberg terminals. These were used by influential traders to exchange confidential information, including each other's entire order books, to enable them to maximise profits for their banks, resulting in hefty bonuses.
Traders allegedly used these tools to rig exchange rates of various currencies that fixed during a 30-second span every trading at 4 pm. Funnily, the entire operation spilled out accidentally and has since triggered multiple agency investigations across continents.
Also Read
According to international media reports, even as banks are considering banning such chat rooms, Bloomberg itself is trying to redeem the reputation of its tools, now associated with market manipulation, by giving access and control over these to employers and regulators.
The idea that even in the numero uno international financial centre at the heart of the most developed market in the world, traders rely on inside information is humbling and confirms my worst fears about the market system we all owe our existence to.
A few years earlier, when I used to track index movements on a daily basis, I would hear from sundry traders about how some big hands wanted Nifty futures for a particular series to close above a particular level for the expiry. And, how they might spike up a particular index heavyweight to achieve this end. Similarly, they could beat down stocks to ensure the index closed below a certain level.
Any enquiries about who these strong hands were often led to dead ends. I was also told by highly regulated players such as fund managers that Indian markets were deep enough and a few people could not control or dictate trades at the index levels, though even they conceded that manipulation at the level of individual scrips on shallow counters were rampant.
Now, I wonder if these strong hands used such tools to exchange sensitive information and fix indexes. If multi-trillion dollar currency market rates can be fixed by a handful of traders, can the much smaller Indian stock market be an exception?
Further, it is reported that many influential currency traders who worked in different banks stayed in the same neighbourhood and often had each other's company for fishing trips and weekend parties. It is not uncommon to see cash packets exchanged during these parties, according to the Bloomberg report. Indian traders might not be fond of fishing trips, but there are always weddings and dandiyas.
Intermediaries have got used to the investigation process and check posts over the past two decades. There has not been much change in the way investigators track the insiders and try to establish patterns of trading, etc.
So, if regulators continue to go down the beaten path, what are their chances of cracking big cases? Should we be at the mercy of an accidental, lucky breakthrough? I am not going to bore you by repeating our unenviable record in catching offenders and bringing them to justice. Let us wait for Sebi to surprise us.