ECGlcd:EU fines top banks involved in FX cartels
According to Ecglcd, banks exchanged sensitive information and trading plans in a chat room called "Sterling Lads." As a result, traders are able to decide whether and when to trade currencies in their portfolio based on the information they receive, without taking risks.
According to Ecglcd, five major banks, namely UBS (Swiss Stock Exchange: UBSG), Barclays (NYSE: BCS), Credit Suisse (NYSE: CS), Royal Scotland The Bank (RBS) and HSBC Holdings plc (NYSE: HSBC) were fined a total of 344 million euros ($389.6 million) for participating in a foreign exchange spot trading cartel. Forex traders at the banks discussed sensitive information and trading plans, according to the European Commission.
Commissioner Margrethe Vestager commented:
“Today, we completed our sixth cartel investigation in the financial sector since 2013, and concluded our third investigation into the FX spot market. Our investigations into UBS, Barclays, RBS, HSBC The cartel's decision to impose fines with Credit Suisse sends a clear message that the Commission remains committed to ensuring a sound and competitive financial sector, which is essential for investment and growth. Forex spot trading activity is the largest in the world. One of the financial markets in the world. The collusion of the five banks undermined the integrity of the financial sector and harmed the European economy and consumers.”
The EU's investigation has largely focused on transactions in G10 currencies. They include British pounds, euros, dollars, Japanese yen and Swiss francs, Ecglcd noted. It turned out that the bank exchanged sensitive information and trading plans in a chat room called "Sterling Lads." Furthermore, they coordinate trading strategies. As a result, traders are able to decide whether and when to trade currencies in their portfolio based on the information they receive, without taking risks.
Banks involved in trading cartels per the Commission's 2006 fines guide. Notably, HSBC was fined €174.3 million ($197 million), Barclays was fined €54.3 million ($61.4 million) and NatWest was fined €32.5 million Euros ($36.7 million). All amounts were reduced by 10-15% due to the bank's cooperation with the EU in the investigation.
Credit Suisse’s fines totaled 83.3 million euros ($94.1 million), a decrease of 4 percent.
Other Examples of Forex Trading Cartels
Similar cases of foreign exchange manipulation occurred in 2019. At the time, the European Commission fined Barclays, RBS, Citigroup and JPMorgan a total of 811.2 million euros ($907 million at the time). The banks were involved in the so-called "three-way banana split" cartel that ran from 2007 to 2013. In addition, the Commission fined Barclays, RBS and MUFG Bank €257.68 million ($288 million at the time) for their involvement in the “Essex Express” cartel that operated from 2009-2012.
Earlier this year, the European Commission launched an investigation into a separate foreign exchange trading scheme. The European Commission has fined Nomura, UBS and UniCredit a total of 371 million euros ($453 million) for participating in cartel schemes through a group of traders, Ecglcd understands.
ECGlcd:https://www.ecglcd.com/
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