JPMorgan Chase & Co. (NYSE:JPM)’s head dealer in London, Richard Usher, is under scrutiny for his alleged involvement in currency manipulation, sources familiar with the matter told Gavin Finch, Liam Vaughan & Suzi Ring of Bloomberg. Richard Usher sent instant messages to a group of traders called “The Bandits Club.” Back then, he was working as a spot currency trader at Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS). U.K. regulators are scrutinizing the messages. Experts expect more traders to come under scrutiny over the next few weeks.

Richard Usher

Richard Usher pooled information

Sources said that Richard Usher’s instant messages included details of his trading positions. He left Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) in 2010. His exit was not related to the regulatory scrutiny. Scrutinizing instant messages is a part of a wider investigation into the rigging of $5.3 trillion-per-day Forex market.

A few months ago, we reported that big banks used instant messages to pool information about their respective positions to manipulate the key WM/Reuters rates. They tried to earn profits by pushing trades during and prior to the 60-second window when WM/Reuters benchmark rates are established. Index providers including MSCI and FTSE use the WM/Reuters rates to track international stocks and bonds. Fund managers use the benchmark rate to determine the daily value of their holdings.

Richard Usher still an active employee of JPMorgan

Richard Usher left Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) and joined JPMorgan Chase & Co. (NYSE:JPM) in August 2010. According to the U.K.’s Financial Conduct Authority’s register, Richard Usher is still an active employee of the U.S. bank. As of December 2012, usher was also a member of the Bank of England’s Forex Joint Standing Committee.

Regulators across the globe are investigating into a number of financial benchmark manipulations.UBS AG (NYSE:UBS) (VTX:UBSN) and Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS), along with two other banks, have already paid $2.6 billion in fine for manipulating London Interbank Offered Rate (Libor). The U.S. Justice Department has also launched an investigation into the Forex rate rigging.