Banks found guilty, penalised for market rigging
(26 May 2015 – Europe/Global) Four of the world’s biggest foreign exchange traders agreed to plead guilty to currency charges after being accused of colluding to influence benchmark rates by aligning positions and pushing transactions through at the same time.
The United States Department of Justice said the traders used online chat rooms to discuss their positions before the rates were set and suppress competition in the market.
In the settlement with the Justice Department, Citicorp parent Citigroup will pay US$925 million (A$1182 million), the highest of the banks penalised.
Barclays agreed to a fine of US$650 million, JPMorgan will pay US$550 million, and Royal Bank of Scotland Group agreed to a US$395 million fine, UBS will pay US$203 million.
Separately, the US Federal Reserve imposed fines of more than US$1.6 billion on the five banks for "unsafe and unsound practices."
London-based Barclays will pay an additional US$1.3 billion as part of settlements with the New York Department of Financial Services, the Commodity Futures Trading Commission and Britain's Financial Conduct Authority.
As part of its settlement with New York banking superintendent Benjamin Lawsky, Barclays agreed to terminate eight employees engaged in currency trading between London and New York.
The Fed also fined Bank of America US$205 million for failing to detect and address conduct by traders who discussed the possibility of entering into agreements to manipulate currency prices, according to a statement.
Other firms, including Deutsche Bank and HSBC Holdings are still under investigation.
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