Both the CFTC and NY state officials are in the midst of a lengthy and expanding investigation into the activities of so called "interdealer brokers" in foreign exchange markets. This appears to be a logical next step, after an investigation of bank FX desks uncovered irregularities.
U.S. authorities are investigating whether middlemen in the $5 trillion-a-day foreign exchange market posted fake bids, rigged auctions and gave confidential information to others who then profited from it. The investigation, by the U.S. Commodity Futures Trading Commission and New York’s Attorney General, is focused on the currency options desks at several interdealer brokers, staking out new territory after U.S. officials prosecuted banks for colluding to manipulate foreign-exchange rates. The interdealer brokers under scrutiny include TFS-ICAP -- the foreign-exchange options joint venture between ICAP Plc and Compagnie Financiere Tradition SA -- as well as Tullett Prebon Plc and New York-based BGC Partners Inc. and its GFI unit, said two people familiar with the matter. purchase of rival GFI.