US Authorities Slam $5.7 Billion Record Fine On 5 Big Banks

<div class="separator" style="clear: both; text-align: center;"> <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhLCEfE1IwHhr1QNUUT3Xf3Rq9_HLfEJQ1C0Ew7gcRdcv0FKF_V_iPxq0lDmonn7kWeIGFCZw8ucvy5sEn-GoPFvj3PlSf_VLKjjXgjrQjxpR-QrHjURnTH12hHRTdjbp0-l_QrnuXSNNiD/s1600/US+Central+Bank.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhLCEfE1IwHhr1QNUUT3Xf3Rq9_HLfEJQ1C0Ew7gcRdcv0FKF_V_iPxq0lDmonn7kWeIGFCZw8ucvy5sEn-GoPFvj3PlSf_VLKjjXgjrQjxpR-QrHjURnTH12hHRTdjbp0-l_QrnuXSNNiD/s1600/US+Central+Bank.jpg" /></a></div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> <b>Five of the world's largest banks are to pay fines totalling $5.7bn (£3.6bn) for charges including manipulating the foreign exchange market.</b></div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> Four of the banks - JPMorgan, Barclays, Citigroup and RBS - have agreed to plead guilty to US criminal charges.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> The fifth, UBS, will plead guilty to rigging benchmark interest rates.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> Barclays was fined the most, $2.4bn, as it did not join other banks in November to settle investigations by UK, US and Swiss regulators.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> Barclays is also sacking eight employees involved in the scheme.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> US Attorney General Loretta Lynch said that "almost every day" for five years from 2007, currency traders used a private electronic chat room to manipulate exchange rates.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> Their actions harmed "countless consumers, investors and institutions around the world", she said.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> Separately, the Federal Reserve fined a sixth bank, Bank of America, $205m over foreign exchange-rigging. All the other banks were fined by both the Department of Justice and the Federal Reserve.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> <b>Cartel threat</b></div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> Regulators said that between 2008 and 2012, several traders formed a cartel and used chat rooms to manipulate prices in their favour.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> One Barclays trader who was invited to join the cartel was told: "Mess up and sleep with one eye open at night."</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> Several strategies were used to manipulate prices and a common scheme was to influence prices around the daily fixing of currency levels.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> A daily exchange rate fix is held to help businesses and investors value their multi-currency assets and liabilities.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> <b>'Building ammo'</b></div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> Until February, this happened every day in the 30 seconds before and after 16:00 in London and the result is known as the 4pm fix, or just the fix.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> In a scheme known as "building ammo", a single trader would amass a large position in a currency and, just before or during the fix, would exit that position.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> Other members of the cartel would be aware of the plan and would be able to profit.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> "They engaged in a brazen 'heads I win, tails you lose' scheme to rip off their clients", said New York State superintendent of financial services Benjamin Lawsky.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> The fines break a number of records. The criminal fines of more than $2.5bn are the largest set of anti-trust fines obtained by the Department of Justice.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> The £284m fine imposed on Barclays by Britain's Financial Conduct Authority was a record by the regulator.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> Meanwhile, the $925m fine imposed on Citigroup by the Department of Justice was the biggest penalty for breaking the Sherman Act, which covers competition law.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> The guilty pleas from the banks are seen as highly significant as banks have settled previous investigations without an admission of guilt.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> The Attorney General warned that further wrongdoing would be taken extremely seriously: "The Department of Justice will not hesitate to file criminal charges for financial institutions that reoffend.</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> "Banks that cannot or will not clean up their act need to understand - it will be enforced."</div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> <br /></div> <div style="text-align: justify;"> <b>BBC</b></div> <br /> <br /> <div style="text-align: justify;"> <br /></div> <div style="text-align: center;"> <b>=============================================================</b></div> <div style="text-align: center;"> <b><span style="background-color: white; color: red; font-size: large;">PLACE YOUR TEXT ADVERTS HERE </span>=============================================================</b><br /> <b>Need Dubai visas (2 weeks or 3 months)? 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US Authorities Slam $5.7 Billion Record Fine On 5 Big Banks

Five of the world's largest banks are to pay fines totalling $5.7bn (£3.6bn) for charges including manipulating the foreign exchang...

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