LONDON (Alliance News) - Barclays PLC was Wednesday fined about USD2.4 billion by US and UK regulators over the foreign exchange market manipulation, while Royal Bank of Scotland Group PLC was fined USD669 million by US regulators.
The Barclays fine comprised USD485 million to the New York State Department of Financial Services, USD400 million to the US Commodities Futures Trading Commission, USD710 million to the US Department of Justice, USD342 million to the Federal Reserve, and GBP284 million to the UK's Financial Conduct Authority.
The Federal Reserve imposed fines of USD342 million each on Barclays Bank PLC, Citigroup Inc and JP Morgan Chase & Co, USD274 million on Royal Bank of Scotland and USD205 million on Bank of America Corp.
Barclays booked a GBP800 million provision in the first quarter of 2014, citing litigation and regulatory investigations primarily relating to foreign exchange manipulation, bringing the total amount provided to GBP2.05 billion, while RBS had GBP654 million provisioned at the end of that quarter and HSBC had the USD809 million it booked in the final quarter of 2014.
Earlier on Wednesday, Swiss bank UBS AG settled with US authorities over the foreign exchange rigging allegations, agreeing to pay hefty fines for its past conduct and pleading guilty to allegations over the manipulation of Libor interbank benchmark interest rates. It faces no criminal charges and no fine from the DOJ on foreign exchange manipulation.
UBS was fined USD342 million by the US Federal Reserve and will take action to correct "unsafe and unsound" business practices relating to its foreign exchange business after the central bank and the Connecticut Department of Banking issued over the business practices. It was given conditional immunity on an antitrust issue relating to euro/dollar collusion by the DOJ's antitrust division in resolving the foreign exchange probe.
The Swiss bank said it will pay a USD203 million fine and accept a three-year term of probation in connection with the Libor scandal, after the Department of Justice terminated a non-prosection deal agreed in 2012 when UBS was fined USD1.5 billion for attempting to rig Libor.
The agreement between UBS and the DOJ, the Federal Reserve and the Connecticut Department of Banking comes about six months since the bank was sanction by the Swiss Financial Market Supervisory Authority after the regulator found that its employees in Zurich "at least attempted" to manipulate foreign exchange benchmarks. FINMA forced UBS to pay CHF134 million at the time, when the UK's FCA fined it USD371 million and the US CFTC fined it USD290 million.
The fines, which came in November 2014, formed part of more than USD4 billion in fines imposed on a group of banks comprised of HSBC Bank, Royal Bank of Scotland, JPMorgan Chase Bank, Citibank, and Bank of America and UBS.
Barclays was not part of November's settlement as the bank carried on with working out a more general coordinated settlement.
The news comes one day after South Africa's Competition Commission initiated an investigation into foreign currency traders over alleged price fixing, with the focus being on trade in currency pairs involving the rand.. The banks under investigation in South Africa are BNP Paribas, BNP Paribas South Africa, Citigroup Inc, Citigroup Global Markets (Pty) Ltd, Barclays Bank Plc, Barclays Africa Group Ltd, JP Morgan Chase & Co, JP Morgan South Africa, Investec Ltd, Standard New York Securities Inc and Standard Chartered Bank.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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Barclays (BARC)