Investigators turn bankers into informants in forex probe - WSJ

(Adds comments from DOJ official)

Sept 15 (Reuters) - U.S. investigators have turned several bank employees into informants to gather evidence against some of their colleagues in the probe of possible manipulation of currency markets, the Wall Street Journal reported, citing people familiar with the matter.

Britain's Financial Conduct Authority (FCA) and U.S. regulators are investigating allegations that dealers at major banks colluded and manipulated key reference rates in the $5.3 trillion-a-day foreign currency market, the world's biggest and least regulated.

Investigators from the U.S. Justice Department and Federal Bureau of Investigation (FBI) are preparing to seek criminal charges against individual traders as early as next month, the Journal said. (http://on.wsj.com/1qPzF5W)

Leslie Caldwell, head of the Justice Department's criminal division, told Reuters last week it was using more body wires and wiretaps to gather evidence in investigations.

Caldwell also indicated that there may not be any prosecutions this year in the foreign exchange probe.

"I think it's too early to tell. We're looking at the evidence, and we're still working very hard, and there is a lot left to do, so I think it's too soon to say," he said.

The Journal report said it isn't clear which banks had secret informants cooperating with the government investigation.

Ethical standards in the foreign exchange market have been put under the spotlight since investigators in the United States, Europe and Asia started examining whether small groups of traders colluded to rig prices by sharing information about their clients' orders.

The global inquiry has not yet concluded but the review has shaken the industry, with dozens of top dealers put on leave or fired and banks under pressure to sharpen up on supervising their traders. (Reporting by Arnab Sen in Bangalore; Editing by Gopakumar Warrier and Greg Mahlich)