By Karen Freifeld
NEW YORK, May 1 (Reuters) - U.S. authorities are on courseto reach multi-billion-dollar agreements with five major banksover allegations of foreign exchange market rigging as soon asthe second half of May, people familiar with the matter toldReuters on Friday.
Talks between the banks and the U.S. Department of Justiceare at an advanced stage, and the collective settlement may wellexceed the $4.3 billion in fines paid by a half-dozen banks toU.S., UK and Swiss regulators last November.
The banks or units of them also are likely to plead guiltyto criminal charges, sources said. Which entities will plead andthe exact charges are still in flux, although one person said antitrust violations are probable.
The five banks are JPMorgan Chase & Co, Citigroup, British banks Royal Bank of Scotland and Barclays and Swiss bank UBS.
The agreements would resolve probes of how tradersmanipulated the largely unregulated $5-trillion-a-day foreignexchange market. Transcripts of online chat rooms made public inNovember show how traders shared confidential information aboutclient orders and otherwise conspired to benefit their owntransactions.
Peter Carr, a spokesman for the Justice Department, declinedto comment.
RBS and Barclays this week set aside a further $1.71 billionfor investigations and litigation involving foreign exchange.RBS's $510 million brought its total FX provision to $1.1billion and Barclays' additional $1.2 billion raised its totalto $3.2 billion.
UBS could set aside more for possible fines or settlementswhen it reports first-quarter results on Tuesday.
In its first-quarter earnings report this week, RBS saidsettlement discussions with the DOJ and "certain other financialregulatory authorities" are at an "advanced" stage. ChiefExecutive Ross McEwan said he expected a resolution with the DOJsome time in the second quarter.
Barclays pulled out of November's coordinated globalsettlement due to issues with the New York Department ofFinancial Services, the state banking regulator headed byBenjamin Lawsky.
Barclays may agree to a partial settlement with the New Yorkregulator this month, but last week Lawsky said the agencywas not ready to resolve its investigation of the British bank'sautomated trading platform.
The four other banks involved in talks with the JusticeDepartment are not licensed or regulated by the New York agency.
Barclays also is likely to settle separate probes byBritain's Financial Conduct Authority and the U.S. CommodityFutures Trading Commission about the same time as it completesthe Justice Department deal, a person familiar with the mattertold Reuters. Both the FCA and CTFC declined to comment. Thefour other banks came to terms with those authorities inNovember.
A Barclays executive said Wednesday the bank wants toresolve the probes as "expeditiously" as possible, but aspokeswoman otherwise declined to comment.
The U.S. Federal Reserve also is expected to extractpenalties as part of the latest settlements with the banks,sources said. A spokesman for the agency declined to comment.
While the punishments will sting harder than expected andmore than they did in November, they won't signal an end to theFX rigging scandal. U.S. authorities are still expected tocontinue investigations into whether the computer programs banksuse for forex trades are rigged in favor of them over clients.
The U.S. Justice Department and Britain's Serious FraudOffice also have opened cases against individuals, which couldtake years to be resolved. (Reporting By Karen Freifeld; Additional reporting by SteveSlater and Jamie McGeever in London; Editing by Soyoung Kim andLeslie Adler)
Barclays (BARC)