New York attorney general investigates foreign-exchange trading

The New York attorney general is investigating possible manipulation in foreign-exchange trading, according to a source, aiming more scrutiny at a market already tainted by scandals that have led to billions of dollars in fines.

The investigation centres on brokers who may be placing fake orders, a technique sometimes called spoofing, according to the source.

These practices are also referred to as ghosting, because they create the impression of activity that isn’t really there.

As New York's top law enforcement official, Eric Schneiderman has sought to expand his oversight over financial markets, targeting allegedly unfair practices in the US stock market over the past year.

In the latest investigation, his office has sent subpoenas for records to interdealer brokers including TFS-ICAP, Tullett Prebon, BGC Partners and GFI Group, the person said.

Spokespeople for the brokers declined to comment.

- Bloomberg