LONDON, March 11 (Reuters) - British oil company BP said none of its currency traders had engaged in inappropriatetrading activity, after a media report alleged one of them hadreceived information from a dealer at Lloyds Banking Group.
Allegations of possible manipulation of the $5.3trillion-a-day foreign exchange market have so far centered onmajor banks.
Financial regulators and monetary authorities around theworld are looking into allegations that traders colluded tomanipulate benchmark exchange rates, a cornerstone of globalmarkets that are used as reference rates by companies, investorsand central banks.
Bloomberg News reported earlier on Tuesday that MartinChantree, a senior foreign exchange dealer at Lloyds, sharedinformation with a forex trader at BP on Jan. 31 2013 about animpending order from a client to sell 300 million pounds fordollars.
Chantree has been suspended from the partly state-ownedbank, Reuters reported on Feb. 4.
Chantree, who has not been accused of any wrongdoing byauthorities, did not respond to messages Reuters left at a phonenumber listed in his name and sent via LinkedIn on Tuesday.
Many people active in the foreign exchange markets say thatsharing information with other players is a vital element thatallows banks and others to manage the risk they take on whenagreeing to fulfill orders for clients and their own needs.
Indeed, industry body the ACI says that banks must beallowed to share details of their overall position with others,but differentiate between that and either cartel-like collusionto move the market or the breaking of confidentiality agreementswith particular clients by sharing details of their orders, bothof which go against the ACI code of conduct.
BP, Europe's second-biggest oil company by stock marketvalue, denied any wrongdoing.
"We carried out a detailed investigation into thisallegation, including examining communication on messagingsystems and phone, and trading activity," a BP spokesman said.
"Based on this detailed investigation, we strongly refuteany suggestion that any BP FX traders engaged in inappropriatetrading activity in this market. BP's trading activity in themarket was fully compliant and in line with regulations, BP'scode of conduct and BP's trading-specific requirements," thespokesman said.
Major commodity producers, such as oil companies and miners,need to be involved in foreign exchange markets to hedge risksassociated with producing in one currency and selling in others.
BP employs four traders who buy and sell currencies for thisreason as well as trading to enhance profits from its main oiland gas business.
British bank Lloyds said it was investigating the matter. "We take individual allegations of this nature very seriouslyand we immediately launched an investigation into the specificallegations raised," a Lloyds spokesman said.
"The investigation is ongoing and at this stage it would beinappropriate to speculate on its outcome."
A spokesman for Britain's Financial Conduct Authority, whichis investigating allegations of collusion between traders atbanks to manipulate key exchange rates, said it was too early tosay whether there would be any regulatory probe of BP.
More than 20 traders at several of the world's biggest bankshave so far been placed on leave, suspended or fired as a resultof the various probes. Last week, the Bank of England suspendedan employee as part of its internal investigation.
No-one has been charged with wrongdoing by authorities.
Lloyds (LLOY)
BP (BP.)
