Barclays faces further scrutiny as US widens foreign exchange market investigation

Barclays is facing further regulatory scrutiny in the US, after the Department of Justice (DoJ) widened its probe into the foreign exchange markets.

The DoJ is examining whether Barclays and Swiss bank UBS sold so-called structured products without disclosing the profit they were making from currency trades used to generate the products’ returns, the Financial Times reported citing sources.

Other banks are also being investigated over allegations of inadequate profit disclosure to clients, the FT added.

The new line of inquiry significantly steps up an existing probe into alleged foreign exchange market rigging that has gripped the international banking world.

US and UK regulators last year fined five banks around £2 billion over failings in currency trading.

UBS took the lion's share of the joint penalty and also paid out to Swiss authorities, taking its total fine to $799 million (£524 million).

Royal Bank of Scotland, HSBC, UBS, JP Morgan Chase and Citibank were also ordered to cough up.

Barclays opted not to settle at the same time as UBS and five other banks because of uncertainty over what penalty it could face from another US regulator.

The DoJ was not involved those penalities. It has asked UBS employees about the bank’s V10 Enhanced FX Carry Strategy, which allowed clients to profit from the currencies’ movement.

Barclays and UBS declined to comment.