EU fines five major banks for currency collusion

EU fines five major banks for currency collusion

Barclays, Royal Bank of Scotland, JPMorgan and Citigroup have been slapped with a combined fine of 811.2 million euros (£708.6 million) after the "Three Way Banana Split" cartel rigged the markets for more than five years.

The financial industry has been hit with billions of Euros in fines worldwide over the last decade for the rigging of benchmarks used in many day-to-day financial transactions.

Competition Commissioner Margrethe Vestager said the banks' behaviour "undermined the integrity of the sector at the expense of the European economy and consumers".

The traders in this cartel were from UBS, Barclays, RBS, Citigroup and JP Morgan, and communicated in three different online chatrooms between December 2007 and January 2013.

Swiss bank UBS was not fined as it had alerted the two cartels to the European Commission. "We have since made significant control improvements".

"We are pleased to resolve this historical matter, which relates to the conduct of one former employee".

Citigroup and Barclays declined to comment.

The second decision ("Forex- Essex Express" cartel) imposes a total fine of almost €258 million Barclays, RBS, and MUFG Bank (formerly Bank of Tokyo-Mitsubishi).

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While the USA has won guilty pleas from JPMorgan, Citigroup, RBS and Barclays, three British traders in a group known as "The Cartel" were acquitted by a U.S. federal court previous year of using a chatroom to coordinate trades and manipulate prices on the spot exchange rate for euros and United States dollars.

Groups of traders from banks including Barclays and Royal Bank of Scotland (RBS) worked together in secret online chatrooms to deceive the markets.

While large, the cartel fines are lower than a 1.3 billion euro penalty for banks for rigging Euribor rates and below a record 3.8 billion euro penalty for collusion between truckmakers, according to Bloomberg.

An RBS spokesperson said: "Today's fine is a further reminder of how badly the bank lost its way in the past and we absolutely condemn the behaviour of those responsible".

The sensitive information exchanged in these chatrooms related to outstanding customers' orders, prices applicable to specific transactions, open risk positions and other details of current or planned trading activities.

Litigators have always been hoping to replicate in Britain the success of USA class action claims against banks such as Goldman Sachs, HSBC and Barclays, that have yielded more than $2 billion for investors in settlements.

"Our firm will be working to recoup losses suffered by non-U.S. pension funds, asset managers, insurance companies and multinational corporations, among others, as a result of the banks' wrongdoing", London-based partner Belinda Hollway said.

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