Five Major Banks to Pay Huge Fines for Manipulating Foreign-Exchange Market
A number of U.S. and European banks have pleaded guilty to their traders manipulating foreign exchange prices of Euros and U.S. dollars since December 2007. The banks have agreed to pay more than USD 5 billion in collective penalties. The banks in question are Citicorp (C), JPMorgan Chase (JPM), London-based Barclays (BCS) and Royal Bank of Scotland (RBS), while UBS was granted conditional immunity because the Swiss bank warned the Department of Justice about the foreign-exchange rate-rigging.
UBS pleaded guilty to wire fraud and agreed to pay a USD 203 million fine. The bank also received a three-year probation term. UBS will also pay USD 342 million to the Federal Reserve.
The banks in question will have to pay a total of USD 9 billion in fines and penalties for manipulating the foreign-exchange market, a common occurrence in the world of banks. Governments around the world have been fighting this criminal activity for years, with limited success. It seems as if banks would rather pay fines than play according to the rules.
Attorney General Loretta Lynch said that “starting in December 2007, currency traders at several multinational banks formed a group dubbed 'The Cartel.’ It is perhaps fitting that those traders chose that name, as it aptly describes the brazenly illegal behavior they were engaging in on a near-daily basis."