21 May 2015
Major international banks have been fined record sums by the US Department of Justice (DoJ) for forex manipulation.
Citicorp, JP Morgan and Chase, Barclays, RBS and UBS have pleaded guilty to felony charges – the first four banks were charges of conspiring to manipulate the price of US dollars and euros exchanged in the forex market. Citicorp, JP Morgan and Chase, Barclays and RBS are to pay criminal fines totalling more than $2.5 billion.
The fifth bank, UBS, has pleaded guilty to manipulating the London Interbank Offered Rate (LIBOR) and other benchmark interest rates and pay a $203 million criminal penalty, after breaching its December 2012 non-prosecution agreement resolving the LIBOR investigation.
According to the DoJ, which carried out the investigation, UBS’ breach of the NPA was based in part on fraudulent and deceptive currency trading and sales practices related to foreign exchange markets; its collusion with other participants in the FX markets; and its failure to take adequate action to prevent unlawful conduct after prior civil, criminal and regulatory resolutions.
Attorney General Loretta E. Lynch said: ‘In other words, UBS promised in other resolutions, not to commit additional crimes – but it did’.
She added that the ‘historic resolutions are the latest in our ongoing efforts to investigate and prosecute financial crimes, and they serve as a stark reminder that this Department of Justice intends to vigorously prosecute all those who tilt the economic system in their [favour]; who subvert our marketplaces; and who enrich themselves at the expense of American consumers’.
Each bank has agreed to pay a criminal fine proportional to its involvement in the conspiracy:
Citicorp, which was involved from as early as December 2007 until at least January 2013,has agreed to pay a fine of $925 million;
Barclays, which was involved from as early as December 2007 until July 2011, and then from December 2011 until August 2012, has agreed to pay a fine of $650 million;
JPMorgan, which was involved from at least as early as July 2010 until January 2013, has agreed to pay a fine of $550 million; and
RBS, which was involved from at least as early as December 2007 until at least April 2010, has agreed to pay a fine of $395 million.