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U.S. widens probe of currency rigging

U.S. prosecutors have expanded their probe of currency-market manipulation by some of the world's largest banks to include the Russian ruble and Brazilian real, sources said.

U.S. prosecutors have expanded their probe of currency-market manipulation by some of the world's largest banks to include the Russian ruble and Brazilian real, sources said.

The Justice Department is using cooperation agreements it reached with banks in May to gather information and interview traders about suspected market rigging, said the sources, who asked not to be identified because the investigation is confidential.

The escalating investigation - of currency traders colluding with their counterparts at other banks to make illegal profits - is scrutinizing trading practices at banks that didn't previously settle currency-rigging claims. Prosecutors are examining a handful of institutions, including Deutsche Bank AG, the sources said. The bank has already disclosed that it is under a half-dozen criminal and regulatory investigations, including for possible currency manipulation.

Prosecutors are also stepping up efforts to charge individuals at major banks, including those that previously settled. The Justice Department has faced criticism from public-interest advocates and lawmakers for resolving Wall Street misconduct with billion-dollar deals that have not led to the arrest of traders. Traders at several banks in Moscow and other locations are being investigated for colluding to influence benchmark rates for emerging market currencies to boost profit for their firms, the sources said.

Some of the trading practices under scrutiny previously drew the attention of the Commodity Futures Trading Commission (CFTC). While it is unclear what specific time period prosecutors are focusing on, previous settlements in the currency investigation punished banks for conduct that took place between 2007 and 2013.

Prosecutors are relying on information provided by banks that resolved the currency probe in May. The banks - Citigroup Inc., Barclays Plc, UBS Group AG, Royal Bank of Scotland Group Plc, and JPMorgan Chase & Co. - all have immunity from additional prosecution from the currency probe as long as they cooperate with investigators by reporting misconduct, turning over data, and making employees available for interviews, according to the agreements.

The settlements do not protect current and former employees of most of the banks. UBS won antitrust immunity, which also covers current employees. The banks all declined to comment.

Spokesmen for the Justice Department, the CFTC, and Deutsche Bank declined to comment on the expansion of the probe.

Antitrust regulators in other countries have opened investigations, too. In July, Brazil identified 15 banks and 30 traders under scrutiny. Among them are Deutsche Bank, Citigroup and Barclays, along with HSBC Holdings Plc, Standard Chartered Plc and Credit Suisse Group AG. The banks declined to comment. HSBC said it was cooperating with regulators and law enforcement in the U.S. and elsewhere.