Swiss fine Citi, Barclays, JP Morgan, RBS, MUFG $91M for FX rigging

by Ike Obudulu Posted on June 6th, 2019

Five global banks, Barclays plc (BCS,BARC.L), Royal Bank of Scotland Group Plc (RBS,RBS.L), Citigroup Inc. (C), JPMorgan Chase & Co. (JPM) and Japan’s MUFG Bank, formerly known as Bank of Tokyo-Mitsubishi, have been fined a total of 90 million Swiss francs ($91 million) by Switzerland’s competition regulator for their roles in colluding on foreign-exchange rates.

Barclays was fined 27 million francs, Citigroup 28.5 million francs and JPMorgan Chase & Co. was hit with a 9.5 million-franc penalty, Switzerland’s Competition Commission said Thursday. UBS Group AG avoided a fine because it helped reveal the existence of the cartel.

The Swiss sanctions come after years of investigation by regulators on both sides of the Atlantic into how traders used chatrooms to fix leading currency exchange rates. Five of the banks agreed last month to pay 1.07 billion euros ($1.2 billion) to resolve a European Union probe into forex collusion.

Traders at Barclays, Citigroup, JPMorgan, Royal Bank of Scotland Group Plc and UBS ran online chatrooms to share sensitive information over six years in a cartel that was known as the “Three-way banana split,” according to Comco. Traders at Barclays, MUFG Bank, RBS and UBS operated the so-called Essex Express, named for the commuter train they all took, to fix trades in a similar manner between 2009 and 2012, according to the Swiss regulator.

Comco fined RBS 22.5 million francs and MUFG Bank Ltd. 1.5 million francs. An investigation into Credit Suisse Group AG’s role is continuing. Bank Julius Bär & Co. AG and Zürcher Kantonalbank have been cleared of wrongdoing, according to Olivier Schaller, Comco’s deputy director.

The Swiss sanctions bring a wave of regulatory probes one step closer to conclusion after traders’ manipulation of benchmark foreign-exchange rates was exposed in 2013, triggering investigations in the U.S. and the U.K. To date, more than a dozen financial institutions have paid about $11.8 billion in fines and penalties globally, with another $2.3 billion spent to compensate customers and investors.

Switzerland’s Comco avoided the damning language of its counterparts, saying only that the sanctioned banks “have committed not to conclude such agreements in the future.” EU Competition Commissioner Margrethe Vestager said last month that its fines “send a clear message that the commission will not tolerate collusive behavior in any sector of the financial markets.”

Comco’s decision can be appealed to the Switzerland’s Federal Administrative Court, but it wasn’t immediately clear if any of the banks would do so. Some of the banks had benefited from a leniency program that led to a reduction of the fine, the regulator said.

MUFG said in an email that the fine relates to “one individual’s conduct” at the bank, and that it’s “taken a number of measures to prevent this occurring again.” Officials at other lenders fined Thursday declined to comment or couldn’t be immediately reached.

Credit Suisse is cooperating fully with Comco’s probe and “intends to vigorously contest the substance of the allegations,” the bank said in an email. “A number of other regulators have concluded their FX-related inquiries without taking any enforcement action against Credit Suisse,’ the bank added.

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