AFP, New York :
US and British regulators fined six major global banks nearly $6 billion Thursday for rigging the foreign exchange market and Libor interest rates.
The far-flung settlement included guilty pleas from Barclays Bank, JPMorgan Chase, Citicorp and the Royal Bank of Scotland for conspiring to manipulate the massive currency market, as well as a guilty plea from Switzerland’s UBS, for violating a prior settlement of Libor charges.
A sixth bank, Bank of America, was fined $205 million by the US Federal Reserve over its foreign exchange trading operations.
The massive settlement addresses what regulators described as a brazen scheme by financial heavyweights to orchestrate trades in the $5.3-trillion-per-day global foreign exchange market in ways that cheated clients and bolstered their own profits.
Traders from banks communicated with instant messages and in a chat room referred to as “the Cartel,” regulators said.
The size of penalties on individual banks ranged from the hundreds of millions of dollars to $2.4 billion for British bank Barclays, depending on a bank’s involvement in the scheme and whether it had already settled with some of the agencies involved in the global investigation.
The Barclays sum was high because it had not participated in an earlier deal between the banks and some of the regulators involved.
“Put simply, Barclays employees helped rig the foreign exchange market,” said Benjamin Lawsky, the head of the Department of Financial Services for New York State.
“They engaged in a brazen ‘heads I win, tails you lose’ scheme to rip off their clients.”
UBS said that it will plead guilty to fraud in the US over the Libor interest rate-rigging scandal and pay $203 million in fresh fines.
The bank will also pay a $342-million fine (307 million euros) to the US Federal Reserve and change the way its foreign exchange system works.
The Justice Department granted the Swiss bank conditional immunity in its foreign exchange probe for cooperating with the investigation. However, Justice demanded the guilty plea on Libor after concluding UBS’ role in foreign exchange breached its 2012 non-prosecution agreement on Libor.
US and British regulators fined six major global banks nearly $6 billion Thursday for rigging the foreign exchange market and Libor interest rates.
The far-flung settlement included guilty pleas from Barclays Bank, JPMorgan Chase, Citicorp and the Royal Bank of Scotland for conspiring to manipulate the massive currency market, as well as a guilty plea from Switzerland’s UBS, for violating a prior settlement of Libor charges.
A sixth bank, Bank of America, was fined $205 million by the US Federal Reserve over its foreign exchange trading operations.
The massive settlement addresses what regulators described as a brazen scheme by financial heavyweights to orchestrate trades in the $5.3-trillion-per-day global foreign exchange market in ways that cheated clients and bolstered their own profits.
Traders from banks communicated with instant messages and in a chat room referred to as “the Cartel,” regulators said.
The size of penalties on individual banks ranged from the hundreds of millions of dollars to $2.4 billion for British bank Barclays, depending on a bank’s involvement in the scheme and whether it had already settled with some of the agencies involved in the global investigation.
The Barclays sum was high because it had not participated in an earlier deal between the banks and some of the regulators involved.
“Put simply, Barclays employees helped rig the foreign exchange market,” said Benjamin Lawsky, the head of the Department of Financial Services for New York State.
“They engaged in a brazen ‘heads I win, tails you lose’ scheme to rip off their clients.”
UBS said that it will plead guilty to fraud in the US over the Libor interest rate-rigging scandal and pay $203 million in fresh fines.
The bank will also pay a $342-million fine (307 million euros) to the US Federal Reserve and change the way its foreign exchange system works.
The Justice Department granted the Swiss bank conditional immunity in its foreign exchange probe for cooperating with the investigation. However, Justice demanded the guilty plea on Libor after concluding UBS’ role in foreign exchange breached its 2012 non-prosecution agreement on Libor.
