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* FCA fines five banks $1.77 bln; U.S. CFTC fines them $1.48bln
* Switzerland claws back 134 mln Swiss francs from UBS
* OCC fines three U.S. banks, including Bank of America,$950 mln
* More penalties expected from U.S. and UK criminalinquiries (Updates to add links to Breakingviews)
By Kirstin Ridley, Joshua Franklin and Aruna Viswanatha
LONDON/ZURICH/NEW YORK, Nov 12 (Reuters) - Regulators finedsix major banks a total of $4.3 billion for failing to stoptraders from trying to manipulate the foreign exchange market,following a yearlong global investigation.
HSBC Holdings Plc, Royal Bank of Scotland Group Plc, JPMorgan Chase & Co, Citigroup Inc, UBSAG and Bank of America Corp all facedpenalties resulting from the inquiry, which has put the largelyunregulated $5-trillion-a-day market on a tighter leash,accelerated the push to automate trading and ensnared the Bankof England.
Authorities accused dealers of sharing confidentialinformation about client orders and coordinating trades to boosttheir own profits. The foreign exchange benchmark they allegedlymanipulated is used by asset managers and corporate treasurersto value their holdings.
Dealers used code names to identify clients without namingthem and swapped information in online chatrooms with pseudonymssuch as "the players", "the 3 musketeers" and "1 team, 1 dream."Those who were not involved were belittled, and traders usedobscene language to congratulate themselves on quick profitsmade from their scams, authorities said.
Wednesday's fines bring total penalties for benchmarkmanipulation to more than $10 billion over two years. Britain'sFinancial Conduct Authority levied the biggest penalty in thehistory of the City of London, $1.77 billion, against five ofthe lenders.
"Today's record fines mark the gravity of the failings wefound, and firms need to take responsibility for putting itright," FCA Chief Executive Officer Martin Wheatley said.
He said bank managers needed to keep a closer eye on theirtraders rather than leaving it to compliance departments, whichmake sure employees follow the rules.
The investigation already has triggered major changes to themarket. Banks have suspended or fired more than 30 traders,clamped down on chatrooms and boosted their use of automatedtrading. World leaders are expected to sign off on regulatorychanges to benchmarks this weekend at the G20 summit inBrisbane, Australia.
In the United States, which has typically been moreaggressive on enforcement than other jurisdictions, theDepartment of Justice, Federal Reserve and New York's financialregulator are still probing banks over foreign exchange trading.
EXASPERATION
Regulators said the misconduct at the banks ran from 2008until October 2013, more than a year after U.S. and Britishauthorities started punishing banks for rigging the Londoninterbank offered rate (Libor), an interest rate benchmark.
The foreign exchange probe has wrapped up faster than thatinvestigation did, and Wednesday's fines reflected cooperationfrom the banks. Britain's FCA said the five banks in its actionreceived a 30 percent discount on the fines for settling early.
The U.S. Commodity Futures Trading Commission ordered thesame five banks to pay an extra $1.48 billion. Swiss regulatorFINMA also ordered UBS, the country's biggest bank, to pay 134million francs ($139 million) and cap dealers' bonuses overmisconduct in foreign exchange and precious metals trading.
The U.S. Office of the Comptroller of the Currency fined theU.S. lenders a total of $950 million. It was the only authorityto penalize Bank of America.
More penalties are likely to follow. Barclays Plc,which was not included in Wednesday's settlement, said it hadpulled out of talks with the FCA and the CFTC to try to seek "amore general co-ordinated settlement" with other regulators thatare investigating its activities.
The FCA said its enforcement activities were focused onthose five plus Barclays, signalling it would not fine DeutscheBank AG.
The CFTC declined to comment on whether it was looking atother banks.
Britain's Serious Fraud Office is conducting a criminalinvestigation, and disgruntled customers can still pursue civillitigation.
RBS, which is 80 percent owned by the British government,received client complaints about foreign exchange trading as farback as 2010. The bank said it regretted not responding morequickly.
The other banks were similarly apologetic.
BANK OF ENGLAND
The currency inquiry struck at the heart of the Britishestablishment and the City of London, the global hub for foreignexchange dealing.
The Bank of England said on Wednesday that its chief foreignexchange dealer, Martin Mallet, had not alerted his bosses thattraders were sharing information.
The British central bank, whose governor, Mark Carney, isleading global regulatory efforts to reform financialbenchmarks, has dismissed Mallet but said he had not doneanything illegal or improper.
It also said it had scrapped regular meetings withLondon-based chief currency dealers, a sign the BOE wants to puta distance between it and the banks after thescandal.
Shares of banks involved in the settlement were downslightly Wednesday afternoon. Bank of America dipped 0.2percent, JPMorgan fell 1.6 percent, and Citi was 0.6 percentlower.
RBS was down 1 percent, HSBC was down 0.3 percent, and UBSwas down 0.1 percent in after-hours trading.
(1 US dollar = 0.9630 Swiss franc) (Additional reporting by Steve Slater, Huw Jones, JamieMcGeever, Clare Hutchison and Matt Scuffham in London andKatharina Bart in Zurich; Writing by Carmel Crimmins and EmilyStephenson; Editing by Alexander Smith, Anna Willard, DavidStamp and Lisa Von Ahn)
