Coverage: Swiss financial watchdog fines banks for forex market rigging

The Swiss financial market regulator WEKO imposed a fine totaling $90.53 million on Citigroup, JP Morgan, Barclays, and the Royal Bank of Scotland for rigging foreign exchange rates.

Reuters’ John Revill and Silke Koltrowitz had the news:

Four British and U.S. banks have been fined 90 million Swiss francs ($90.53 million) for rigging the foreign exchange market, Switzerland’s competition authority said on Thursday.

Barclays, Citigroup, JP Morgan and Royal Bank of Scotland were punished after the authority, known as WEKO, said it found “several anti-competitive arrangements between banks in foreign exchange spot trading”.

UBS was not fined as it revealed the cartels to the competition authorities first, while an investigation is still underway into Credit Suisse. WEKO said it had closed its investigation into Julius Baer and Zuercher Kantonalbank.

Bloomberg’s Hugo Miller had the details:

Barclays was fined 27 million francs, Citigroup 28.5 million francs and JPMorgan Chase & Co. was hit with a 9.5 million-franc penalty, Switzerland’s Competition Commission said Thursday. UBS Group AG avoided a fine because it helped reveal the existence of the cartel.

The Swiss sanctions come after years of investigation by regulators on both sides of the Atlantic into how traders used chatrooms to fix leading currency exchange rates. Five of the banks agreed last month to pay 1.07 billion euros ($1.2 billion) to resolve a European Union probe into forex collusion.

Traders at Barclays, Citigroup, JPMorgan, Royal Bank of Scotland Group Plc and UBS ran online chatrooms to share sensitive information over six years in a cartel that was known as the “Three-way banana split,” according to Comco. Traders at Barclays, MUFG Bank, RBS and UBS operated the so-called Essex Express, named for the commuter train they all took, to fix trades in a similar manner between 2009 and 2012, according to the Swiss regulator.

Stephen Morris from the Financial Times provided the background of the case:

Last month the EU fined Barclays, Citi, RBS, JPMorgan and Japan’s MUFG €1bn after its own five-year investigation into manipulation of the $5tn-a-day forex market. UBS also escaped a fine in that probe for alerting authorities to the misconduct, and Credit Suisse is similarly fighting the EU’s case.

Since allegations of benchmark currency rate manipulation first surfaced in 2013 more than a dozen financial institutions have paid almost $12bn in fines around the world.

Weko, which is led by president Andreas Heinemann and director Patrik Ducrey, opened a probe into the banks in 2014 and said the fines could total as much as 10 per cent of the turnover generated in the relevant market in Switzerland over a set period of time.