Five Global Banks Agree to Pay Over $5 Billion to Resolve Criminal Charges of Conspiring to Manipulate Currency Prices

The U.S. Attorney’s Office announced today that Barclays, Citi, J.P. Morgan and the Royal Bank of Scotland (RBS) will plead guilty to charges of conspiracy to manipulate foreign currency prices. The five global banks have agreed to pay a combined $5.6 billion in penalties to the state, U.S., and U.K. authorities to resolve a longstanding U.S. led investigation into foreign exchange and Libor manipulation.

U.S. Attorney General Loretta Lynch said J.P. Morgan, Citi, Barclays, and RBS will plead guilty to charges of conspiring to manipulate the price of the euro and the U.S. dollar. The fifth bank—UBS, AG—received immunity for being the first bank to report possible antitrust violations. Nonetheless, UBS will plead guilty to charges of manipulating the Libor benchmark (also known as the Intercontinental Exchange London Interbank Offered Rate, it is the benchmark rate that some of the world’s leading banks charge each other for short-term loans) and pay a fine.

In a related matter, Bank of America will pay a $205 million fine to resolve a Fed investigation into similar foreign currency and Libor-related corruption allegations. All of the fines come in addition to the $4.3 billion that most of the same banks were forced to pay last November in order to resolve similar charges.

So, how did these collusion schemes work?

The ‘Cartel’, as the foreign currency traders at these banks referred to themselves, used a chat room and coded language to communicate with each other for the purposes of moving foreign currency rates in ways that were favorable to those in their group. No individuals have been criminally charged for the misconduct, but according to a statement by the Justice Department, investigations into individuals with roles in the scheme will continue.

Here’s how the criminal fines will shake out for each bank:

  • Citi – $925 million
  • Barclays – $650 million
  • J.P. Morgan – $550 million
  • RBS – $395 million
  • UBS – $203 million
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