EU fines five banks $1.2 billion for foreign exchange rigging
Banks formed two cartels to manipulate spot foreign exchange market for 11 currencies
Banks formed two cartels to manipulate spot foreign exchange market for 11 currencies. PHOTO: REUTERS
BRUSSELS:
Barclays, Citigroup, JP Morgan, MUFG and Royal Bank of Scotland were fined a combined €1.07 billion ($1.2 billion) by the European Union on Thursday for rigging the multi-trillion dollar foreign exchange market.
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.
The European Commission said the banks formed two cartels to manipulate the spot foreign exchange market for 11 currencies, including the US dollar, the euro and the pound.
"These cartel decisions send a clear message that the Commission will not tolerate collusive behaviour in any sector of the financial markets," European Competition Commissioner Margrethe Vestager said in a statement.
The EU competition enforcer said most of the traders knew each other on a personal basis and set up chatrooms with names such as "Essex Express 'n the Jimmy" because all of them except "James" lived in Essex and met on their train commute to London.
One cartel ran from December 2007 to January 2013, while the other operated from December 2009 to July 2012, it added.
Swiss bank UBS was not fined as it had alerted the two cartels to the European Commission.
JPMorgan and RBS said they were pleased to have settled the cases and had made changes to their controls. JPMorgan said it related to the conduct of one former employee and RBS that it served as a reminder of how it had lost its way in the past.MUFG said it had also taken measures to prevent a re-occurrence.
Barclays and Citigroup declined to comment.
A group dubbed the "Three Way Banana Split", made up of traders at UBS, Barclays, RBS, Citigroup and JP Morgan, was handed a fine totalling €811.2 million, with Citigroup taking the biggest hit at €310.8 million.
The Essex Express cartel involving UBS, Barclays, RBS and MUFG, was given a €257.7 million fine, with the penalty against Barclays, the largest for this cartel, at €94.2 million.
Barclays, Citigroup, JP Morgan, MUFG and Royal Bank of Scotland were fined a combined €1.07 billion ($1.2 billion) by the European Union on Thursday for rigging the multi-trillion dollar foreign exchange market.
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.
The European Commission said the banks formed two cartels to manipulate the spot foreign exchange market for 11 currencies, including the US dollar, the euro and the pound.
"These cartel decisions send a clear message that the Commission will not tolerate collusive behaviour in any sector of the financial markets," European Competition Commissioner Margrethe Vestager said in a statement.
The EU competition enforcer said most of the traders knew each other on a personal basis and set up chatrooms with names such as "Essex Express 'n the Jimmy" because all of them except "James" lived in Essex and met on their train commute to London.
One cartel ran from December 2007 to January 2013, while the other operated from December 2009 to July 2012, it added.
Swiss bank UBS was not fined as it had alerted the two cartels to the European Commission.
JPMorgan and RBS said they were pleased to have settled the cases and had made changes to their controls. JPMorgan said it related to the conduct of one former employee and RBS that it served as a reminder of how it had lost its way in the past.MUFG said it had also taken measures to prevent a re-occurrence.
Barclays and Citigroup declined to comment.
A group dubbed the "Three Way Banana Split", made up of traders at UBS, Barclays, RBS, Citigroup and JP Morgan, was handed a fine totalling €811.2 million, with Citigroup taking the biggest hit at €310.8 million.
The Essex Express cartel involving UBS, Barclays, RBS and MUFG, was given a €257.7 million fine, with the penalty against Barclays, the largest for this cartel, at €94.2 million.