European Commission fines five global banks over FX Market Misconduct

The European Commission fined Citigroup, Barclays, JP Morgan, MUFG and Royal Bank of Scotland (RBS) for a total amount of USD 1.2 billion for forex trading market misconduct.

Nine individual traders from the banks were exchanging information on online chat rooms about current or planned trading activities. This allowed the traders to identify opportunities for coordination, including temporarily refraining from trading activity to avoid interfering with one another.

The manipulation involved 11 currencies, including the euro, U.S. dollar and British pound, and took place between 2007 and 2013. The traders would coordinate whether and when to sell and buy the currencies for their advantage.

Citigroup received the top fine of EUR 310.7 million. Barclays was fined EUR 210.3 million, RBS was fined EUR 249.2 million, JP Morgan will pay EUR 228.8 million, and MUFG will pay EUR 69.8 million.

UBS was also involved in the market misconduct, however it received full immunity for denouncing the two cartels formed by the banks and avoided a fine of EUR 285 million.

A JPMorgan spokesman said one former employee was involved in the case, adding “we have since made significant control improvements.”

These behaviors highlight the need to create strong internal controls and compliance procedures, to detect and prevent misconducts inside regulated companies. Going through an audit of these controls regularly can help find and fill the gaps in the process.

Date: 21st May 2019

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