AmEx Shares Fall After Report of FBI Probe on Forex Pricing
(Bloomberg) -- American Express Co. declined after a report that the FBI is investigating pricing practices at its foreign-exchange operations.
Shares of the company dropped 1.2 percent, to $105.68, after the Wall Street Journal said the Federal Bureau of Investigation began an inquiry last month. The probe is examining whether customers were misled as the credit-card lender sought to win more business handling international payments, the newspaper said, citing unidentified people with knowledge of the probe.
An AmEx spokeswoman declined to comment, as did the FBI.
AmEx said in July that it was commissioning a third-party review of its foreign-exchange business and that it would fix any problems uncovered. The FX International Payments unit accounts for less than half of one percentage point of overall revenue, the company said at the time. Debevoise & Plimpton LLP is conducting the review, a person familiar with the matter said Wednesday, asking not to be identified because the information isn’t public.
AmEx started the review after the Journal said some employees had boosted exchange rates for business customers without notifying them. Current and former employees told the newspaper that AmEx’s commissions-driven culture encouraged the practice. Customers were recruited with low initial rates, but weren’t informed that those prices were subject to change without notice, according to the Journal.
The FBI is waiting for the company to answer a list of questions, the Journal said. Meanwhile, the unit’s employees have been told not to delete emails.
The Office of the Comptroller of the Currency also is examining how AmEx disclosed pricing and potential rate increases to customers, the Journal said, citing a person familiar with that inquiry. Bryan Hubbard, an OCC spokesman, declined to comment.
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