The UK’s financial conduct authority, fined Citibank £225,6m, HSBC £216m, JPMorgan Chase Bank £222.2m, Royal Bank of Scotland £217m and UBS £233m, while the US Commodity Futures Trading Commission fined Citibank and JPMorgan $310m each, RBS and UBS, $290m and HSBC $275m. The Swiss regulator, FINMA, has levied a CHF 134m fine on UBS.
Barclays, however, has chosen to follow its own course and, the FCA said, it will continue to progress its investigation into the firm; the investigation will cover Barclays “G10 spot FX trading business and also wider FX business areas”.
The fines are the largest ever imposed by the FCA, or its predecessor the Financial Services Authority (FSA), and also the first time it had pursued a settlement with a group of banks in such a manner, one coordinated with other regulators.
Martin Wheatley, FCA CEO, 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. Senior management commitments to change need to become a reality in every area of their business.”
According to a statement by the FCA: “At the heart of today’s action is our finding that the failings at these Banks undermine confidence in the UK financial system and put its integrity at risk.
It added: “Between 1 January 2008 and 15 October 2013, ineffective controls at the Banks allowed G10 spot FX traders to put their Banks’ interests ahead of those of their clients, other market participants and the wider UK financial system. The Banks failed to manage obvious risks around confidentiality, conflicts of interest and trading conduct.
These failings, the FCA said, “allowed traders at those Banks to behave unacceptably.
Aitan Goelman, the CFTC’s Director of Enforcement, stated: “The setting of a benchmark rate is not simply another opportunity for banks to earn a profit. Countless individuals and companies around the world rely on these rates to settle financial contracts, and this reliance is premised on faith in the fundamental integrity of these benchmarks. The market only works if people have confidence that the process of setting these benchmarks is fair, not corrupted by manipulation by some of the biggest banks in the world.”