Global banks fined for foreign-exchange collusion

CITIGROUP and Barclays are among global banks fined a total of 90 million Swiss francs (R1.35 billion) by Switzerland’s competition regulator for their roles in colluding on foreign-exchange rates.

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 yesterday.

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 to resolve an EU 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.

Comco fined RBS 22.5 million francs and MUFG Bank Ltd 1.5 million francs.

An investigation into Credit Suisse Group AG’s role is continuing. Bank Julius Bär & Co AG and Zürcher Kantonalbank have been cleared of wrongdoing, according to Olivier Schaller, Comco’s deputy director.

The Swiss sanctions bring a wave of regulatory probes one step closer to conclusion after traders’ manipulation of benchmark foreign-exchange rates was exposed in 2013, triggering investigations in the US and the UK.

To date, more than a dozen financial institutions have paid about $11.8 billion in fines and penalties globally, with another $2.3 billion spent to compensate customers and investors.

Switzerland’s Comco avoided the damning language of its counterparts, saying only that the sanctioned banks “have committed not to conclude such agreements in the future.”

EU competition commissioner Margrethe Vestager said last month that its fines “send a clear message that the commission will not tolerate collusive behaviour in any sector of the financial markets.”

Comco’s decision can be appealed to the Switzerland Federal Administrative Court, but it wasn’t immediately clear if any of the banks would do so.

Some of the banks had benefited from a leniency programme that led to a reduction of the fine, the regulator said.

MUFG said in an email that the fine relates to “one individual’s conduct” at the bank, and that it had “taken a number of measures to prevent this occurring again.”

Officials at other lenders fined yesterday declined to comment or couldn’t be immediately reached.