By Emily Flitter and Jamie McGeever
NEW YORK/LONDON, Feb 5 (Reuters) - New York bankingregulator Benjamin Lawsky is seeking documents from some of thebiggest banks in foreign exchange trading, including DeutscheBank, Goldman Sachs and Barclays, asource familiar with the matter said Wednesday, as a globalprobe into possible market manipulation widens.
At least seven other law enforcement offices and regulatorsinternationally are investigating whether banks rigged the $5.3trillion-a-day currency markets. Martin Wheatley, chiefexecutive officer of Britain's Financial Conduct Authority, saidon Tuesday that his watchdog group's probe could extend into2015, and that the allegations it is looking into are "every bitas bad" as the Libor manipulation scandal.
More than 20 traders across Wall Street have either been puton leave, suspended or fired since the foreign exchangeinvestigations were formally announced in October. DeutscheBank, the biggest foreign exchange trader in the world, firedthree New York-based currency traders, a source said on Tuesday.
The probes are looking into whether senior traders at ahandful of big banks colluded via online chat room and messagingservices to manipulate benchmark foreign exchange rates, ordaily "fixings."
These fixings are a cornerstone of global financial markets,used to price trillions of dollars' worth of investments anddeals and relied upon by companies, investors and central banks.
The probes are probably contributing to a decline in foreignexchange trading volumes in recent months. On the ThomsonReuters dealing platform, daily spot foreign exchange tradingvolumes fell 11.5 percent in December to $92 billion, the lowestlevel since the company started tracking the data almost fouryears ago. Some of that decline may be due to dealers' handlingmore of their trading in-house.
The top five banks in foreign exchange trading account forabout 50 percent of total volume, and the top 10, which alsoinclude Goldman, Credit Suisse, RBS and Barclays,account for almost 80 percent.