Citi and HSBC banks dominate the skyline of Canary Wharf, London.
Barclays, Citigroup, J.P. Morgan, MUFG and Royal Bank of Scotland have been fined a total of 1.07 billion euros ($1.2 billion) by EU antitrust regulators for rigging the spot foreign exchange market for 11 currencies.
Swiss bank UBS was exempted from a 285 million euro fine since it alerted the existence of two cartels to the European Commission. The financial industry has been hit with billion euro fines worldwide in the last decade for rigging key benchmarks.
“Companies and people depend on banks to exchange money to carry out transactions in foreign countries. Foreign exchange spot trading activities are one of the largest markets in the world, worth billions of euros every day,” EU Commissioner Margrethe Vestager said in a press release Thursday.
“Today we have fined Barclays, The Royal Bank of Scotland, Citigroup, J.P. Morgan and MUFG Bank and these cartel decisions send a clear message that the Commission will not tolerate collusive behavior in any sector of the financial markets. The behavior of these banks undermined the integrity of the sector at the expense of the European economy and consumers,” Vestager added.
The EU investigation that has been ongoing for the past six years revealed that some individual traders from various banks in charge of forex trading — a form of trading executed on an intra-day basis — exchanged sensitive information and trading plans through various online professional chat rooms.
A similar case with the U.S. regulators is ongoing where Barclays, BNP Paribas, Citigroup, J.P. Morgan, Royal Bank of Scotland and UBS have entered related guilty pleas, and been collectively fined more than $2.8 billion.
U.S. regulators said the foreign exchange rate rigging was allegedly done through chat rooms with such names as “The Cartel,” “The Mafia” and “The Bandits’ Club,” through tactics with such names as “front running,” “banging the close,” “painting the screen” and “taking out the filth.”
Shares of Barclays and RBS were trading lower, but UBS edged a bit higher on the news. Meanwhile, J.P. Morgan and Citigroup shares were down slightly in pre-market trading.
—Reuters contributed to this report