Regulators in the U.S., Britain and Switzerland ordered five banks to pay about $3.3 billion in the first wave of penalties since authorities began a global probe into the rigging of key foreign-exchange benchmarks last year.
Switzerland’s UBS AG was ordered to pay the most at $800 million, according to statements from the U.S. Commodity Futures Trading Commission, Britain’s Financial Conduct Authority and the Swiss Financial Market Supervisory Authority. Citigroup Inc. will pay $668 million, followed by JPMorgan Chase & Co. at $662 million. Royal Bank of Scotland Group Plc was fined about $634 million and HSBC Holdings Plc $618 million. Barclays Plc, which had been in settlement talks, said it wasn’t ready for a deal.
Banks and individuals still face further penalties from other agencies as a result of dealers colluding with counterparts at other firms to rig benchmarks used by fund managers to determine what they pay for foreign currency. The U.S. Justice Department and Britain’s Serious Fraud Office are also leading criminal probes into the $5.3 trillion-a-day currency market.
“The traders put their own interest ahead of their customers, they manipulated the market -- or attempted to manipulate the market -- and abused the trust of the public,” FCA Chief Executive Officer Martin Wheatley told reporters at a briefing in London today. The regulator will press firms to review their bonus plans and claw back payments already made.
The U.S. Office of the Comptroller of the Currency may also announce penalties later today and the Federal Reserve said it is working with the Justice Department in the probe. Finma also said it has started enforcement proceedings against 11 UBS employees.
“Many will see this as drawing a line under this sad episode,” said Tim Dawson, an analyst at Helvea SA in Geneva who covers financial firms. “We are less optimistic,” he said. The banks are “likely to face a heavy burden of potential litigation in coming years.”
UBS fell 0.2% to 16.71 francs in Zurich, while RBS slipped 0.8% to 374.60 pence. Barclays fell 2% to 229.90 pence as of 1:54 p.m. in London trading. By delaying, Barclays won’t now receive the 30% reduction in its penalty the FCA awarded the other banks settling today.
The FCA isn’t planning to fine Deutsche Bank AG, the second biggest player by market share in foreign exchange. Credit Suisse Group AG has also been given the all-clear from the U.K. regulator, a spokesman for the Swiss bank said.
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