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5 Big Banks Hit with $3.2 Billion Forex Rigging Fines. Global regulators announced Wednesday $3.2 billion (2.5 billion euros) in fines against five major US and European banks for attempting to manipulate foreign exchange markets. The hefty fines, unveiled in London, Washington and Zurich, follow a worldwide probe into the scandal over the $5.3-trillion-per-day forex market, around 40 percent of which takes place in the British capital. British banks HSBC and Royal Bank of Scotland (RBS), US peers Citigroup and JPMorgan Chase, and Swiss lender UBS have all been fined by Britain's Financial Conduct Authority (FCA) and the US Commodity Futures Trading Commission (CFTC). The FCA hit the five banking giants with a total penalty of £1.1 billion ($1.7 billion, 1.4 billion euros), while the CFTC has fined them $1.4 billion. The Swiss Financial Market Supervisory Authority (FINMA) also announced a settlement of 134 million Swiss francs ($139 million) with UBS over the matter. Barclays -- which was at the heart of the 2012 Libor rate-rigging affair -- was not included in the settlements, but it added that it continued to hold talks with regulators "with the objective of bringing this to resolution in due course". A string of scandals, including Libor rigging and product mis-selling, has damaged the reputation of major banks, which had also helped sparked the notorious 2008 global financial crisis that led to a worldwide recession. "The Financial Conduct Authority has imposed fines totalling £1,114,918,000 . on five banks for failing to control business practices in their G10 spot foreign exchange (FX) trading operations," the regulator said in a statement. "The G10 spot FX market is a systemically important financial market. At the heart of today's action is our finding that the failings at these banks undermine confidence in the UK financial system and put its integrity at risk." The FCA said that, between January 1, 2008 and October 15, 2013, it found that "ineffective controls" at the five banks allowed their G10 forex traders "to put their banks' interests ahead of those of their clients, other market participants and the wider UK financial system". Traders at the different banks "formed tight knit groups in which information was shared about client activity", it added. The British regulator said traders used code to identify clients without naming the them, such as "The 3 Musketeers", "The Players" and "The A-team". - 'Conflicts of interest' - "The banks failed to manage obvious risks around confidentiality, conflicts of interest and trading conduct," the FCA said. "These failings allowed traders at those banks to behave unacceptably. They shared information about clients' activities which they had been trusted to keep confidential and attempted to manipulate G10 spot FX currency rates, including in collusion with traders at other firms, in a way that could disadvantage those clients and the market." At the same time, the CFTC announced in a separate statement that the five banks were being punished for "attempted manipulation of, and for aiding and abetting other banks' attempts to manipulate, global foreign exchange benchmark rates to benefit the positions of certain traders." It added that Citi, HSBC, JPMorgan, RBS and UBS had "coordinated trading with other banks in private chat rooms in their attempts to manipulate" the market. The CFTC also ordered the banks to "cease and desist from further violations, and take specified steps to implement and strengthen their internal controls and procedures . to ensure the integrity of their participation in the fixing of foreign exchange benchmark rates and internal and external communications by traders." News of the FCA fine was welcomed by the British government. "Today we take tough action to clean up corruption by a few so that we have a financial system that works for everyone," said finance minister George Osborne. "The banks that employed them face big fines -- and I will ensure that these fines are used for the wider public good." The total FCA fine is a record amount and eclipses the £532 million penalty it handed down over the Libor scandal. Copyright (2014) AFP. All rights reserved. Comments. Most Viral This Week. Like us on facebook to get more stuff like this in your news feed! Five banks fined $3.46bn over forex rigging. The US Commodity Futures Trading Commission has joined British counterparts in punishing five banks over foreign currency exchange rigging. Global regulators have announced $US3.2 billion ($A3.46 billion) in fines against five major US and European banks over allegations of rigging in foreign exchange markets. The hefty fines, announced in London, Washington and Zurich, follow a worldwide probe into the scandal surrounding the forex market. British banks HSBC and Royal Bank of Scotland, US groups Citibank and JPMorgan Chase, and Swiss bank UBS have all been fined by Britain's Financial Conduct Authority and the US Commodity Futures Trading Commission, the pair said in a statement. The FCA hit the five banking giants with a total penalty of STG1.1 billion ($A2 billion), while the CFTC has fined them $US1.4 billion ($A1.5 billion) over the same matter. In addition, the Swiss Financial Market Supervisory Authority announced a $139-million settlement with UBS. "The failings at these banks undermine confidence in the UK financial system and put its integrity at risk" Britain's FCA said in a statement. British lender Barclays was not included in the settlements but the bank added separately that it continued to hold talks with regulators. The FCA said that, between January 1, 2008 and October 15, 2013, it found that "ineffective controls" at the five banks allowed their foreign exchange traders "to put their banks' interests ahead of those of their clients, other market participants and the wider UK financial system". It added that the banks "failed to manage obvious risks around confidentiality, conflicts of interest and trading conduct". The total FCA fine is a record amount and eclipses the STG532 million ($A971 million) penalty it handed down to banks and brokers over the 2012 Libor interbank rate-rigging scandal. The US CFTC announced in a separate statement that the five banks were being punished for "attempted manipulation of, and for aiding and abetting other banks' attempts to manipulate, global foreign exchange benchmark rates to benefit the positions of certain traders." Five big banks hit with $3.2 billion forex rigging fines. The hefty fines centerd on London, the world’s biggest hub for the $5.3-trillion-per-day forex market, and the British government hailed a move to “clean up corruption” in the City as the financial center’s reputation has been badly damaged in recent years. British banks HSBC and Royal Bank of Scotland (RBS), US peers Citigroup and JPMorgan Chase, and Swiss lender UBS have all been fined by Britain’s Financial Conduct Authority (FCA) and the US Commodity Futures Trading Commission (CFTC). The FCA hit the five banking giants with a record penalty of ?1.1 billion ($1.7 billion, 1.4 billion euros), while the CFTC has fined them $1.4 billion. The Swiss Financial Market Supervisory Authority (FINMA) also announced a settlement of 134 million Swiss francs ($139 million) with UBS over the matter. However Barclays — which was at the heart of the 2012 Libor rate-rigging affair — was not included in the settlements and remains under investigation by authorities. The uncertainty sent Barclays’ share price sliding 2.15 percent to 229.55 pence in early afternoon deals on the falling FTSE 100 index. The bank had last month set aside ?500 million for a potential fine to settle forex allegations. In recent years, a string of scandals has damaged the reputation of major banks, which sparked the notorious 2008 global financial crisis that led to a subsequent worldwide recession. The FCA said that it found “ineffective controls” at the five banks between 2008 and 2013, allowing traders “to put their banks’ interests ahead of those of their clients, other market participants and the wider UK financial system.” “The traders put their own interests ahead of their customers. They attempted to manipulate the market and abused the trust of the public and us as regulators,” FCA chief executive Martin Wheatley told reporters at a press conference in London. The FCA said that it had proposed new rules for the 36 banks operating in the foreign exchange market. The investigation homed in on trading in the world’s top 10 currencies, known as the “G10.” Traders at the different banks “formed tight knit groups in which information was shared about client activity,” the British regulator said. It added that traders used code to identify clients without naming the them. They referred to themselves with nicknames like “The 3 Musketeers,” “The Players” and “The A-team.” “The banks failed to manage obvious risks around confidentiality, conflicts of interest and trading conduct,” the FCA said. At the same time, the CFTC said in a separate statement that the five banks were being punished for “attempted manipulation of, and for aiding and abetting other banks’ attempts to manipulate, global foreign exchange benchmark rates to benefit the positions of certain traders.” It added that Citi, HSBC, JPMorgan, RBS and UBS had “coordinated trading with other banks in private chat rooms in their attempts to manipulate” the market. The CFTC also ordered the banks to “cease and desist from further violations, and take specified steps to implement and strengthen their internal controls and procedures.” Bank of England governor Mark Carney expressed deep concern over the forex scandal. “We have been concerned about the circumstances around this and the conduct in markets more generally,” Carney said Wednesday. News of the FCA fine was welcomed by the British government. “Today we take tough action to clean up corruption by a few so that we have a financial system that works for everyone,” said finance minister George Osborne. “The banks that employed them face big fines — and I will ensure that these fines are used for the wider public good.” The total FCA fine is a record amount and eclipses the ?532 million penalty it handed down over the Libor scandal. Christopher Dembik, an economist at Saxo Bank in France, said the fines were “extremely weak and perfectly manageable” compared to the banks’ holdings. But he added that it did show a “willingness” of regulators “not to repeat the mistakes made in the last global financial crisis.” Comments. MORE FROM Business & Economy. Fed's Yellen says solid economic growth means more rate hikes ahead. Outgoing Federal Reserve Bank Chair Janet Yellen said on Friday that solid economic growth, faster. Russian central bank head says banking cleanup more than half complete. MOSCOW: Russia’s clean-up of its banks is more than half complete, central bank Governor Elvira.

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