UK, US and Swiss regulators have collectively slapped fine totalling $3.4bn on banking giants UBS, HSBC, Citigroup, RBS and JPMorgan over allegations of price fixing in the foreign exchange market.
The fines relate to the five banks G10 currencies spot forex trading operations.
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In simultaneous settlements with the UK’s Financial Conduct Authority (FCA) and the Commodity Futures Trading Commission (CFTC) of the US, the lenders agreed that they did not have the necessary controls in place to prevent manipulation of what is the largest financial market in the world, with $5.3 trillion a day in trades.
UBS received the biggest penalty, paying $661m to US and UK regulators, and CHF134m to Swiss regulator FINMA.
FINMA also ordered UBS to automate at least 95% of its global foreign exchange trading and limit bonuses for traders of foreign exchange and precious metals, where it said it had also found evidence of serious misconduct, to 200% of their base salary for two years.
Regulators found evidence that traders had colluded to try and manipulate benchmark foreign exchange rates by sharing confidential information about client orders with one another right up until October 2013.
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By GlobalDataThe financial regulator in London, the global hub for foreign exchange (FX) trading, said it had launched a review of the spot FX industry that will require firms to scrutinise their systems and may involve them looking at how they do things in other markets such as derivatives and precious metals.
The five banks earned a 30% discount for agreeing to settle early.
