Banks charged $4.3 billion in global FOREX investigation

Regulators from the US and the UK fined six major banks a total of $4.3 billion for failing to stop traders from trying to manipulate the foreign exchange market, following a global investigation lasting almost a year.

Banks charged $4.3 billion in global FOREX investigation

Regulators from the US and the UK fined six major banks a total of $4.3 billion for failing to stop traders from trying to manipulate the foreign exchange market, following a global investigation lasting almost a year.

HSBC Holdings Plc, Royal Bank of Scotland Group Plc, JPMorgan Chase & Co, Citigroup Inc, UBS AG and Bank of America Corp all faced large fines resulting from the inquiry, which has put the largely unregulated $5 trillion daily market on much stricter rules, accelerating the push to regulate trading. Authorities accused dealers of sharing private information about client orders and coordinating trades to increase their individual profits.

These penalties bring total fines for benchmark manipulation to over $10 billion during a two year period. Britain's Financial Conduct Authority (FCA) charged the biggest penalty in the history of the City of London, $1.77 billion, against five of the lenders.

"Today's record fines mark the gravity of the failings we found, and firms need to take responsibility for putting it right," stated FCA Chief Executive Officer Martin Wheatley. He said in future bank managers need to keep a closer eye on their traders rather than leaving it to compliance departments, which make sure employees follow any regulations.

The investigation already has caused major changes in the market. Banks have suspended or fired more than 30 traders and increased their use of automated trading. World leaders are expected to sign the regulatory changes at the G20 summit being held in Australia this year.


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