Citigroup, JPMorgan among banks fined $1.2 billion for Forex rigging

Cornelia Mascio
Mag 18, 2019

The EU Commission has fined five banks €1.07bn (£940m) for rigging foreign exchange markets for 11 currencies, it announced today.

Four banks in the "Banana Split" cartel - Barclays, RBS, Citigroup and JP Morgan - were fined €811m in all.

The Commission's investigation found that some individual traders in charge of FX trading on behalf of the banks exchanged "sensitive information and trading plans", which then "enabled them to make informed market decisions on whether to sell or buy the currencies they had in their portfolios and when".

Commissioner Margrethe Vestager, in charge of competition policy said: "Companies and people depend on banks to exchange money to carry out transactions in foreign countries".

Swiss bank UBS was involved but not fined after it alerted the EC about the two cartels.

UBS Group, the first to inform European regulators about the collusion efforts, was not fined.

JPMorgan and RBS said they were pleased to have settled the cases and that they had made changes to their controls.

The financial industry has been hit with billions of Euros in fines worldwide over the last decade for the rigging of benchmarks used in many day-to-day financial transactions.

MUFG said it had also taken measures to prevent a re-occurrence.

The Essex express infringement encompassed communications in two chatrooms - Essex express 'n the Jimmy and semi grumpy old men - among traders from UBS, Barclays, RBS and MUFG Bank between December 2009 and July 2012.

"Today's fine is a further reminder of how badly the bank lost its way in the past and we absolutely condemn the behaviour of those responsible", RBS said in an emailed statement.

Citigroup and Barclays declined to comment.

Traders exchanged information about outstanding customers' orders, bid-ask spreads, their open-risk positions and details of current or planned trading activities. They would sometimes agree to "stand down' or stop a trading activity to avoid interfering with another trader in the group".

According to Brussels, the banks formed those cartels in order to influence 11 different currencies, including the euro, United States dollar, pound sterling, Japanese yen, Swiss franc, and others.

The second decision - in the so-called forex- Essex express cartel - the regulator imposed a €257m fine on Barclays, RBS and MUFG Bank.

The EU is continuing to investigate banks for possible EU antitrust violations.

Deutsche Bank, Credit Suisse and Credit Agricole SA are targeted by an European Union probe into a suspected cartel for trading of USA dollar supra-sovereign, sovereign and agency bonds via online chatrooms between 2009 and 2015. UniCredit SpA said it faces a possible fine from the eurozone probe.

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