#AceFinanceNews – LONDON – Nov.12 – Five of the world’s biggest banks have today been handed fines totalling more than £2billion for rigging the £3.5trillion-a-day foreign exchange market.
‘ Five of world’s biggest banks are fined record £2BILLION over rigging foreign exchange markets – but no bankers are prosecuted ‘
British, US and Swiss authorities all launched an onslaught after an 18-month investigation as regulators today revealed the latest scandal to rock the industry.
State-owned Royal Bank of Scotland has been fined £217million ($344million) by the London-based Financial Conduct Authority (FCA) as well as £182million ($290million) by the US Commodity Futures Trading Commission (CFTC).
The others involved in the settlement are Citibank, HSBC, JPMorgan Chase and UBS, who will also pay up to £500million each. Barclays said it continues to hold discussions with regulators.
More than 30 traders have been fired, suspended, put on leave, or resigned since the probes started, and the Serious Fraud Office has launched a criminal investigation – but there have been no arrests.
The FCA said today that bankers, who referred to themselves as the ‘A-Team’ and ‘Three Musketeers’, colluded on-line by sharing information about foreign exchange orders so they could make cash for their banks and bag big bonuses themselves.
The FCA has said it issued the record fines because five banks were failing to control business practices in their foreign exchange trading operations.
Barclays will be next to be punished.
Its penalties dwarf the £532 million imposed by the regulator on banks and City brokers over the previous big regulatory scandal involving the manipulation of the interbank lending rate, Libor.
RBS chief executive Ross McEwan said: ‘To say that I am angry about the misconduct would be an understatement.
‘We had people working at this bank who did not know the difference between right and wrong, or worse, didn’t care about the distinction.’
The FCA said traders at different banks formed tight-knit groups in which information was shared about client activity, including using code names to identify clients without naming them.
Names given to these groups included ‘the players’, ‘the 3 musketeers’, ‘1 team, 1 dream’, ‘a co-operative’ and ‘the A-team’. Traders shared the information obtained through these groups to help them work out their trading strategies.
FCA chief executive Martin Wheatley said: ‘Today’s record fines mark the gravity of the failings we found and firms need to take responsibility for putting it right.
‘They must make sure their traders do not game the system to boost profits or leave the ethics of their conduct to compliance to worry about.’
An inquiry by the Bank of England found that no official was involved in any unlawful or improper behaviour in the forex market.