Citi steps toward pleading guilty
‘In active discussions’ with prosecutors
Citigroup confirmed Monday that it could plead guilty to an antitrust charge as part of a settlement with the Department of Justice over evidence that traders of the U.S.-based global bank manipulated foreign-exchange currency rates.
Publicly acknowledging the potential guilty plea for the first time, Citibank said in a quarterly filing with the Securities and Exchange Commission that it “is in active discussions” with federal prosecutors about a potential resolution of the foreign-exchange investigation.
Citigroup, JPMorgan Chase, British banking giant Barclays and Royal Bank of Scotland are expected to plead guilty to criminal antitrust charges and collectively pay billions of dollars in penalties as part of a group settlement that U.S. officials could announce as early as this week, The Wall Street Journal reported Wednesday.
However, bank officials are continuing talks with U.S. officials, and a final resolution could require additional time, one person familiar with the negotiations said Monday.
Swiss banking giant UBS is also expected to reach a settlement, but is likely to receive immunity from prosecution because it was the first bank to step forward and cooperate with U.S. investigators pursuing the foreign-exchange case, the person familiar with the investigation said.
JPMorgan reported in a quarterly filing last week that it was in the “advanced stages” of discussions with the Department of Justice and the Federal Reserve regarding a foreign-exchange settlement.
The U.S. criminal investigation focuses on evidence that bank traders attempted to manipulate the $5.3-trillion-a-day foreign-exchange market by pushing currency rates up or down to benefit their own transactions.
Royal Bank of Scotland boosted its reserves for the expected settlement to roughly $1.07 billion, the bank reported in an April 30 filing. Similarly, Barclays reported that it had increased its total reserves for investigations and litigation primarily related to foreign exchange to approximately $3.8 billion.
Citigroup, JPMorgan, Bank of America, Royal Bank of Scotland, UBS, and London-based HSBC in November agreed to pay $4.3 billion collectively in civil settlements of foreign-exchange investigations by U.S., British and Swiss financial regulators.
The foreign-exchange cases represent the most recent in a series of financial corruption cases that have tarnished the image of major banks. Investigators in the U.S. and around the globe have extracted costly settlements from banks whose traders manipulated financial benchmarks used to set rates on trillions of dollars in mortgages, loans and some complex financial derivatives.
Citigroup’s Monday filing reported that Justice “has decided to decline prosecution” with respect to an investigation of the bank’s activities and practices related to the London Interbank Offered Rate, the rate-setting benchmark known as Libor.