Barclays fined record $2.4bn over forex fix

Barclays paid $2.38bn to the regulators, including £284m to Britain’s financial watchdog Matt Dunham/AP

The Times Harry Wilson, City Editor, and Alexandra Frean

Six of the world’s largest investment banks, including Barclays and Royal Bank of Scotland, have been fined about $5.7 billion by US regulators in the second and final major settlement with the industry over the foreign exchange markets manipulation scandal. The banks pleaded guilty to rigging the $5.3 trillion-a-day global currency market for several years. On top of a $4.3 billion settlement last November, the fines take the total levied against foreign exchange rigging to nearly $10 billion, exceeding the $9 billion so far paid over Libor manipulation. Barclays paid by far the biggest fines, handing over $2.38 billion to the regulators, including £284 million to the Financial Conduct Authority, Britain’s financial watchdog. It was the only bank not to have taken part in November’s settlement, and in addition to its UK fine the lender also paid $485 million to the New York Department of Financial Services and $400 million to the US Commodities Futures Trading Commission. As well as the forex fines, Barclays agreed a $125 million settlement with the CFTC over the manipulation of ISDAfix, a benchmark rate used to set the price of interest rate derivatives. That deal marks the first settlement over the investigation into the potential rigging of the rate. The largest proportion of the penalties was levied by the US Department of Justice, which fined the banks more than $2.5 billion as part of a settlement deal that saw all but one of the lenders, UBS, plead guilty to criminal charges. None will face a criminal trial. The Federal Reserve imposed fines of $1.8 billion, with Barclays, UBS, Citigroup and JP Morgan paying $342 million each, RBS paying $274 million and Bank of America $205 million. Documents released by the regulators echoed the findings of the investigation last year that highlighted how traders conspired to influence the value of twice-daily fixings of key currency pairings to enhance their profits. Electronic chatroom conversations discovered by officials found traders forming their own groups to manipulate the market, some of which had nicknames such as “the players” and “the 3 musketeers”. Barclays said that it would be firing eight employees in its deal with the DoJ, with one employee writing in an electronic message “markup is making sure you make the right decision on price . . . which is whats [sic] the worst price i can put on this where the customers decision to trade with me or give me future business doesn’t change . . . if you aint cheating, you aint trying”. Loretta Lynch, the US attorney general, described the settlement as historic, while the FBI said the banks’ actions were “criminality on a massive scale”. The DoJ fines are the largest imposed by the agency and Citigroup’s $925 million in fines constitutes the biggest recorded for breaking the Sherman Act, the US anti-trust law. Antony Jenkins, Barclays chief, said: “The misconduct at the core of these investigations is wholly incompatible with Barclays’ purpose and values.” Sir Philip Hampton, chairman of RBS, said that the new findings exposed serious shortcomings at the taxpayer-backed lender. Taking the fines it paid in November, forex penalties have now cost RBS more than $1.2 billion. More than 50 of the bank’s staff have been caught up in the investigation.

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