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Big Banks Get Big Fines for Foreign Currency Manipulation

Big Banks Get Big Fines for Foreign Currency Manipulation

After a long-running investigation, United States government agencies are imposing billions of dollars in fines on a group of the world’s largest banks, with several of the banks pleading guilty to criminal charges.  The penalties arise from price-fixing in foreign currency markets.

The United States Justice Department disclosed that JPMorgan Chase, Citigroup, Barclays Plc and Royal Bank of Scotland Plc have entered guilty pleas.  The banks will pay $550 million, $925 million, $650 million and $395 million, respectively, in criminal fines for fixing dollar and euro prices in a half-trillion dollar per-day market.  UBS AG and Barclays Plc will enter guilty pleas and pay criminal penalties of $203 million and $60 million, respectively, for breaching a 2012 non-prosecution agreement with the Justice Department over the London Interbank Offered Rate (“LIBOR”), a benchmark interest rate.  These five banks will also be on federal probation for three years.  Separately, the U.S. Federal Reserve is assessing $1.6 billion in fines against the banks, and a $205 million penalty against Bank of America Corp.

In addition, Barclays Plc will pay $1.3 billion and fire eight employees to settle with the New York State Department of Financial Services, the United States Commodity Futures Trading Commission and the United Kingdom’s Financial Conduct Authority.

This $5.7 billion in fines comes on the heels of $4.3 billion many of these banks paid last November to settle similar charges from British and United States regulators.  It brings the total fines paid by large global banks for financial wrongdoing in the last two years to about $60 billion.

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