Page 52 - Bank Case Studies

The banks were accused of failings that meant

their traders were able to club together to rig

Foreign Exchange markets as late as 2013 and as
early as 2007.

On the 3rd of April 2018, the Telegraph
Newspaper carried the story that “Banks fined £3.7bn for rigging

foreign exchange markets”. The banks in question were Barclays,

Royal Bank of Scotland, JPMorgan, UBS, Bank of America and
Citigroup who were hit with huge currency manipulation penalties by

UK and US authorities and collectively they were fined $6 billion for

foreign exchange manipulation.

Barclays was handed the biggest UK bank fine in history when the

FCA ordered Barclays to pay £284.4m as part of the British bank’s
£1.5bn settlement with the City watchdog and four US regulators.

Regulators detailed how traders at

the banks, referring to themselves
with names such as “The Cartel”,

colluded to rig euro-dollar currency

benchmarks, profiting at the

expense of customers with one

Barclay’s trader in electronic chats writng "if you ain't cheating, you
ain't trying", while others used hand signals to cheat clients and fix

financial markets. The foreign exchange market is worth around $5.3

trillion-a-day in transactions.

Such mark-ups "represented a key revenue source for Barclays" and
were a high priority for sales staff, regulators said. One individual

working as a vice-president at Barclays suggested that the maximum
mark-up should be added wherever possible. (1)