European Union fines banks over $1 billion over foreign exchange cartel

Barclays was one of five global banks fined by European antitrust officials

Barclays was one of five global banks fined by European antitrust officials

The commission, which polices anti-trust issues, fined Barclays, Royal Bank of Scotland, Citigroup and JPMorgan over 811 million euros for collaborating in a foreign exchange spot trading cartel dubbed "Forex - Three Way Banana Split".

Barclays was fined €210.3 million and Mitsubishi UFJ Financial Group must pay almost €70 million as part of the settlement with the EU's antitrust regulator.

They exchanged sensitive information and trading plans through the chatrooms to give them an advantage when making market decisions as they bought and sold currencies, the commission said.

The European Commission said individual traders at the banks involved formed two cartels to manipulate the spot foreign exchange market for 11 currencies, including the dollar, the euro and the pound.

A spokesperson for MUFG Bank said: "The European Commission has found that the high standards that we aspire to in our business were not met on this occasion".

The cartels were exposed by a sixth bank, UBS, which was named in the investigation but avoided a fine after blowing the whistle.

UBS, which escaped the latest fines, said: "This is a legacy matter where UBS was the first bank to disclose potential misconduct". That case involves another online chatroom and banks may be fined at a later date.

The financial industry has been hit with billions of Euros in fines worldwide over the last decade for the rigging of benchmarks used in many day-to-day financial transactions.

JP Morgan said the fine related to the conduct of one former employee and RBS that it served as a reminder of how it had lost its way in the past.

Traders exchanged information about outstanding customers' orders, bid-ask spreads, their open-risk positions and details of current or planned trading activities.

Traders from UBS, Barclays, RBS and Bank of Tokyo-Mitsubishi (now MUFG Bank) communicated through two chatrooms, the Commission said, between December 2009 and July 2012.

MUFG said in a statement that they "are committed to ensuring integrity and compliance with the regulatory authorities in every jurisdiction in which we operate, and have taken a number of measures to prevent this occurring again".

Because Barclays, RBS, Citigroup, and JPMorgan all received reduced fines for their cooperation with the investigation, they will not be able to appeal the commission's ruling.

At €311m, Citigroup's fine was the largest, followed by fines of €249m for RBS, €229m for JPMorgan, and €210m for Barclays. They traded 11 currencies, including the euro, the U.S. dollar, the British pound and the Japanese yen.

The EU is continuing to investigate banks for possible EU antitrust violations.

It also said the traders occasionally co-ordinated trading strategies through online chatrooms.

Eight banks are the focus of yet another European Union probe looking at the trading of eurozone sovereign bonds from 2007 to 2012.

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