Pump Court

Kevin Toomey

Call 2004

The Foreign Exchange Fix, The Reality

This article was first published by Butterworths Journal of International Banking & Financial Law (JIBFL).

Key Points:

  • Banks do not manipulate the fix, they manage it.
  • Traders could collude, but they have to co-operate to manage risk.
  • The fix favours clients not the banks’ traders because traders have to buy or sell currency on the open market – on which rates fluctuate.
  • Clients chose to trade at a particular time, for certainty and predictability, not at a particular rate so it is fair to infer that they cannot be too concerned about any potential gain or loss.


The coverage of the foreign exchange ‘fixing’ scandal has been rather predictable so far. Predictable media condemnation of bankers, predictable speculation about potential profits and bonuses amassed and a predictable failure to accurately portray exactly how the fixing system works and what really happens in it.

This article focusses on the practicalities and realities of the fixing process, how traders approach it, and who, if anyone, are the winners and losers.

Official ‘fixing’ of benchmark rates for particular currency pairs allows institutions to allocate a daily rate to any business it wishes to transact or to value. It also gives certainty for certain legal issues, for example if a transaction is being negotiated it can be contractually agreed to use the 4pm fixing rate for a chosen day.

Simply put, the rate is fixed with reference to the actual rates trading at around 4pm and then the ‘mid-rate’ of the bid/offer spread at that time becomes the fixed rate. So, to use the most commonly traded currency pair, the Euro against the Dollar as an example, if the spread at 4pm is 1.3848 to 1.3852, the mid-rate will be 1.3850 and that will be the fixed rate.

Clients leave orders with their banks to buy or sell at the fixed rate, sometimes the banks know about the orders days in advance and sometimes only minutes. Often they will have ‘two-way’ interest from a combination of their clients. For example, 15 individual and completely separate clients may want to buy a total of “200 million at the fix and 10 others, equally unconnected, may wish to sell a total of “180 million at the same time. All the orders will be filled at the same rate, and because they net off, the trader’s balance is a mere “20 million. In FX terms, this is a miniscule amount. Of course these amounts of hundreds of millions are simply illustrative and of a size only relevant to a very few market participants.

  • Direct Access Qualified

Instructing Kevin Toomey

To instruct Kevin or for any further information please contact our clerks.

Clerk: John Grimmer
Telephone: +44 (0)7776 154 664
Email: Click here

Kevin Toomey is a specialist advocate who works in all areas of crime including the full range of fraud, money laundering, dishonesty and drugs offences.

Kevin has particular experience in cases resulting from the current investigations into the FX and LIBOR markets. He is regularly instructed as leading or junior counsel in complex and substantial cases and is recognised for his meticulous attention to detail and client friendly approach.

He also undertakes confiscation and asset forfeiture work and is a member of Chamber’s regulatory team, with particular experience in medical regulatory work.

Kevin is ranked as a leading junior in both fraud and business and regulatory crime by the Legal 500 directory.

Kevin is accredited to undertake work suitable for direct access.

Practice Areas


Kevin is ranked as “a leading junior in fraud” by the Legal 500 directory.

“He has an exceptional ability to get on with clients from all walks of life” Legal 500 directory.

Notable fraud cases

R v B

Leading junior in a Rare Earth Metals fraud. Kevin has particular experience in REM boiler room frauds.

R v G

Leading junior in a recycling credits fraud.

R v S

Leading junior in an international conspiracy to import hundreds of kilos of cocaine and launder the proceeds.

R v S

Led defence junior in a conspiracy to defraud by investment bank staff using counterfeit financial instruments to the value of $1 billion.

R v B

Led defence junior in a multi-million pound, 18 handed property fraud.

R v A

Led defence junior in a 10 handed fraud and money laundering case involving the laundering of the proceeds of the importation of 275 kilos of heroin.

R v W

Led defence junior in a multi-handed international conspiracy to defraud a UK clearing bank.

R v Y

Defended alone in a multi-handed international conspiracy to launder the proceeds of drug crime. Every other defendant pleaded guilty on the first day of trial, Mr Y was acquitted.

R v S

Led defence junior in a 14-handed conspiracy to defraud. The client was acquitted following a submission of no case to answer.

R v W

Defended a client who was found with £400,000 in cash in his car and claimed to be looking after it for a friend. The Defendant was acquitted.

R v D

Defended alone in a multi-handed conspiracy to defraud worth over £7m.

R v G

Represented a client in forfeiture proceedings who claimed that the £12,000 seized from him had been won on fruit machines. The money was returned to the client.

Maritime Law

Kevin has been instructed to represent or advise a number of clients who have been charged in relation to frauds and offences under the Merchant Shipping Act arising out of their activities as marine archaeologists and divers of shipwrecks.

In recent years, the Maritime and Coastguard Agency have brought prosecutions alleging that divers have taken items from wrecks and not complied with their obligations to report those finds to Her Majesty’s Receiver of Wreck.

As well as representing defendants in such cases, Kevin regularly gives advice to individuals and to diving clubs as to their responsibilities in this complex area of law which is being increasingly prosecuted.

Murder & Manslaughter

Notable murder & manslaughter cases

R v E

Led defence junior in a multi-handed murder trial. The defendant was acquitted.

R v M

Led defence junior in a murder trial. The case involved the cross-examination of numerous expert witnesses; every eye witness gave evidence via an interpreter.

R v W

Led defence junior in a 3 month, multi-handed attempted murder trial. The defendant was acquitted of attempted murder.

R v F Ltd

A gross negligence manslaughter case, where following defence submissions the prosecution offered no evidence.


“He has very strong technical knowledge around financial markets” Legal 500 directory.

Kevin has been instructed to represent a number of clients in relation to FX fixing investigations and LIBOR rigging allegations; including investigations by the FCA and the DOJ.

His acknowledged expertise comes from a successful career in banking before joining 2 Bedford Row. For over 15 years he worked in dealing rooms as an FX trader and in senior managerial positions in several investment banks.

That highly specialised experience has led to him being recognised by professional and lay clients as often the first counsel of choice in this area of law.

Kevin lectures and conducts training courses on the financial markets, insider trading and regulation and he advises a number of city institutions on their regulatory and money laundering responsibilities and compliance procedures. His articles are regularly published in various legal journals.

Practice Areas


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