New York fines Credit Suisse US$135 million over forex manipulation

NEW YORK: US regulators hit banking giant Credit Suisse with a US$135 million fine to resolve allegations its traders manipulated foreign exchange prices, New York officials announced Monday.

The illicit activity began at least as far back as 2008 through as recently as 2015, and included profiting at clients’ expense and improperly sharing client information, the New York State Department of Financial Services said in a statement.

The department’s superintendent Maria Vullo said certain bank executives “deliberately fostered a corrupt culture” which permitted repeated violations of the law and of client trust.

The action against Credit Suisse is the latest in a series of agreements by major international banks to settle the investigations by US authorities into the alleged manipulation of the foreign exchange market. In late September, the British bank HSBC agreed to pay US$175 million to avoid prosecution.

Credit Suisse traders used online chat rooms to share client information, discuss coordinating trades and attempt to manipulate currency prices and benchmark rates – diminishing competition among banks and increasing profits at clients’ expense, according the statement.

The investigation also found executives encouraged traders to engage in “front-running,” or trading ahead of known client orders.

As part of an agreement with regulators, the bank will be required to retain an outside expert for one year to review remedial measures taken to protect against the misconduct.

Credit Suisse earlier this month announced that quarterly profits had soared almost six fold to US$244 million as the company proceeds with restructuring and cost cutting.

Early this year, US authorities announced a US$5.28 billion settlement with Credit Suisse over its role in the sale of the kind of toxic securities that led to the global financial crisis of 2008. — AFP