(Reuters) – Barclays PLC, Citigroup Inc., JPMorgan Chase & Co., Mitsubishi UFJ Financial Group Inc. and Royal Bank of Scotland PLC were fined for a total of € 1.07 billion (€ 1.2 billion) by the European Union on Thursday for rigs multitrillion forex market.
Banks have hit billions of dollars in penalties worldwide over the past decade for rigging benchmarks used in many daily financial transactions, further damaging the industry's fragile reputation after
The European Commission said that individual traders at the banks concerned formed two cartels to manipulate the foreign exchange market for 11 currencies, including the dollar, the euro and the pound.
"These cartel decisions send a clear message that the Commission will not tolerate collusive behavior in any sector of the financial markets," said European Competition Commissioner Margrethe Vestager in a statement.
Ci tigroup met with the highest fine of EUR 31
EU competition officers said most of the merchants knew each other in a personal basis and set up chat rooms like "Essex Express & # 39; n the Jimmy, who got this name because everyone except "James" lived in Essex, east of London and met on their train commute to the British capital.
The five-year investigation found that nine traders who spread across the banks exchanged sensitive information and trading plans in the chat rooms and sometimes coordinated trading strategies.
"The merchants who were direct k competitors, typically logged in multilateral chat rooms. and had extensive conversations on a variety of topics, including periodic updates of their trading activities, "the Commission said in a statement." The "Essex Express" cartel, which also involved the AC hatroom called "Semi Grumpy Old Men", ran between December 2009 and December 2012. The second cartel is called "Three Way Banana Split" and involves other chat rooms called "Two and a half men" and "Only Marge" – ran from December 2007 until January 2013.
Information changed of businessmen in the chat room included details of their customers' orders, the bid spreads for specific transactions, their open risk positions and other details of current or planned trading activities.
Sometimes merchants would coordinate trading activity, for example through a practice called "standing", whereby someone the groups would temporarily stop trading to avoid disturbing others, the Commission said.
JP Morgan o ch RBS both said they were happy to have settled the cases and that they have since changed their controls.
JP Morgan said the fine was related to a former employee and RBS behavior that it acted as a rem
] The cartel "Three Way Banana Split", consisting of traders at UBS, Barclays, RBS, Citigroup and JPMorgan, was fined a total of EUR 811.2 million.
The Essex Express group with UBS, Barclays, RBS and MUFG received a fine of EUR 257.7 million, with the fine against Barclays largest for this cartel of EUR 94.2 million.
Allegations of extensive currency market manipulation were first reported in 2013 after Libor's scandal in 2012, where traders found themselves having rigged the adjustment of interbank loan rates.
US and the British authorities have then fined seven of the world's highest banks totaling about $ 10 billion to try to manipulate exchange rates.
Meanwhile, US prosecutors have charged a handful of former merchants over currency construction. Three former London-based traders were acquitted of all allegations in October, although others are waiting for convictions.
Meanwhile, the British Serious Fraud Control released its own forex investigation in 2016 and said there was insufficient evidence of a realistic outlook
Thursday's EU fine has allowed an investor start-up watching banks to raise alleged exchange rate-related losses in Europe.
Litigators have long hoped to replicate in the United Kingdom the success of US complaints against banks such as Goldman Sachs, HSBC and Barclays, which have given more than $ 2 billion to investors in settlements.
Scott & Scott, a US law firm that has set up a UK store after success in the United States where it was the leader in the action against 15 banks, said it had been waiting for the European Commission's punishment.
"Our company will work to recover losses incurred by non-US pension funds, asset managers, insurance companies and multinational corporations, including due to bank inaccuracies," says London-based partner Belinda Hollway.