Well, it’s been a few weeks, so are you ready for yet another major scandal from the financial sector? Ready or not here we go. Just as LIBOR starts working its way through the courts, a scandal within the massive foreign exchange or FX market is getting rolling. Much like LIBOR, which involved rigging a market that was the global interest rate for loans, the alleged impropriety in the FX market could touch every financial institution in the world.

So far the investigation is focusing on an instant-message group where currency traders may have conspired to manipulate the foreign exchange market.

Regulators are focusing on an instant-message group the traders set up to share information about their positions and client orders over a period of at least three years, four people with knowledge of the probe said this month. The roster of banks in the group changed as the men moved firms and also included Barclays Plc, Royal Bank of Scotland Group Plc and UBS AG, three people with knowledge of the communications said.

Investigators are weighing whether the messages amounted to attempts to manipulate the market, two people said. The five firms account for about 47 percent of the $5.3 trillion-a-day foreign-exchange market, according to a May survey by Euromoney Institutional Investor Plc. Two other traders, who weren’t part of the conversations and who asked to not be identified because they do business with those involved, said that they and others in the market referred to the message group as “The Cartel.”

Mexican drug lords eat your heart out, this Cartel is playing with trillions not mere billions.

Previously the scandal with FX traders was limited to smaller scale crimes such as traders front-running clients but now it appears traders were manipulating the benchmark rates that ripple throughout the global financial system.

But it’s a victimless crime, right? Everyone chisels everyone in the financial markets, so who cares?

The rates determine what many pension funds pay for their foreign exchange and are used by index providers such as FTSE Group to calculate indexes spanning multiple currencies. Index tracker funds, which buy and sell currencies at the 4 p.m. WM/Reuters rates, typically place their orders in the hour or so before the close, giving dealers a picture of their complete order book in advance of the so-called fix.

Because banks agree with clients to trade at the WM/Reuters rates, regardless of later moves, dealers are at risk of losses if the market moves against them.

This is actually a scandal which does impact Main Street. Like LIBOR manipulation affected the interest rate people received for home, credit card, and car loans – the FX market heavily influences financial products and services the average person uses, such as pensions.

What penalties are coming remains a mystery but it seems JPMorgan Chase and Citigroup have already decided to take precautionary measures by sidelining their top London currency dealers to avoid further problems with regulators over their business practices.