Page 53 - Bank Case Studies

“Benjamin Lawsky, the head of the Department of

Financial Services (DFS), ….said: “Put simply, Barclays
employees helped rig the foreign exchange market. They

engaged in a brazen ‘heads I win, tails you lose’ scheme to

rip off their clients.”’ (1)

Whilst US attorney general Loretta Lynch said:

"They acted as partners – rather than competitors – in an

effort to push the exchange rate in directions favorable to
their banks but detrimental to many others," she said,

using "coded language to conceal their collusion". (2)

The four US regulators and the FCA levied $5.7bn in fines directly for

manipulating foreign exchange benchmarks. Additionally, UBS and

Barclays were ordered to pay $263m to the Department of Justice
because their activity violated agreements signed when the banks

were fined for Libor rigging.

Despite these huge fines, which took the combined penalties for
foreign exchange manipulation to $10bn, shares in the banks surged

on investors’ relief that they were not larger. Barclays had set aside
£2 billion in relation to the investigations but was not judged to have

breached a deferred prosecution agreement with the Department of

Justice (DoJ).

Barclays has agreed to pay a combined total of £1,534 million

(sterling equivalent). In common with other financial institutions

announcing FX settlements today with the DOJ, Barclays has also
agreed to plead guilty to a violation of US anti-trust law.