Courtesy of Pam Martens.
New York City's Billionaire Mayor, Michael Bloomberg, Majority Owner of Bloomberg LP, Home of the Bloomberg Chat Room
In recent months we’ve learned that the National Security Agency (NSA) has been spying on tens of millions of law-abiding citizens’ emails and telephone calls placed through companies like Google, Yahoo, Verizon, AT&T and Sprint Nextel. What the NSA does not appear to have been spying on are the Bloomberg chat rooms where real financial frauds involving potentially trillions of dollars in trades have been occurring for years.
Now, the ultimate embarrassment has occurred for those sleuths at the NSA. The Wall Street Journal is reporting that investigators probing a new line of market manipulation, rigged foreign currency trading, have found that potential lawbreakers were so cavalier about their conduct that they used chat names such as “The Bandits’ Club” and “The Cartel.”
On December 20, 2012, we reported that the Bloomberg chat room was the brand choice for traders plotting to rig the interest-rate benchmark known as Libor. Municipalities and other investors have filed lawsuits alleging that the rigging of this benchmark has cost them billions of dollars in losses. A total of five large international banks have cumulatively paid over $3.5 billion to settle charges of rigging Libor and other related interest rate benchmarks.
Prosecutors have released a sampling of chats on the Bloomberg system to make their case that the interest-rate benchmarks were systematically rigged. Many of the chats involved Tom Hayes, a trader who worked for Citigroup and later, UBS. Hayes communicated with colleagues, with inter-dealer brokers and with traders at other large Wall Street firms.
In one electronic chat on November 20, 2006, Hayes explained to a junior UBS employee that he and another trader “generally coordinate” and “skew the libors a bit.” Hayes added that “really need high 6m fixes till thursday,” meaning he wanted the 6-month Libor rate submitted by UBS to be rigged higher to aid his trading positions until Thursday.
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