Five major banks have agreed to plead guilty to charges of conspiring to manipulate the exchange rate of U.S. dollars and euros, the Justice Department announced Wednesday.
Citicorp, JPMorgan Chase & Co., Barclays, the Royal Bank of Scotland and UBS AG have agreed to pay fines totaling $2.7 billion.
In addition, the banks will pay another $1.6 billion in fines imposed by the Federal Reserve. The Justice Department also fined Bank of America $200 million for engaging in “unsound practices” related to the trading. Barclays also will pay $1.3 billion in fines to the New York State Department of Financial Services, the U.S. Commodity Futures Trading Commission and the UK’s Financial Conduct Authority, Reuters reported.
Altogether, the financial institutions will pay about $5.7 billion to settle the charges.
“The charged conspiracy fixed the U.S. dollar-euro exchange rate, affecting currencies that are at the heart of international commerce and undermining the integrity and the competitiveness of foreign currency exchange markets which account for hundreds of billions of dollars worth of transactions every day,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division.
The conspiracy ran from December 2007-January 2013, according to plea agreements. Traders at Citicorp, JPMorgan, Barclays and the Royal Bank of Scotland manipulated benchmark exchange rates, coordinating their actions through an electronic chat room using coded language. They coordinated their currency trading to affect the daily benchmark rates set by the European Central Bank and World Market/Reuters, using tactics such as agreeing to withhold bids or offers for currency.
“By agreeing not to buy or sell at certain times, the traders protected each other’s trading positions by withholding supply of or demand for currency and suppressing competition in the [foreign exchange] market,” the Justice Department said.
