Banks Plead Guilty to Foreign Exchange Market Collusion and Agree to Pay Over $5.8 Billion in Fines

Five major banks - Barclays PLC, Citicorp, JPMorgan Chase & Co., The Royal Bank of Scotland PLC, and UBS AG - have agreed with the U.S. Department of Justice to plead guilty to violating U.S. law through their conduct in the foreign exchange market. The guilty pleas reflect widespread collusion in the FX market over several years. The banks have also agreed to pay more than $2.7 billion to the Department of Justice to resolve the DOJ's FX investigations, in addition to fines imposed by the Federal Reserve and other regulatory bodies.

Key Takeaways:

• Five major banks - Barclays PLC, Citicorp, JPMorgan Chase & Co., The Royal Bank of Scotland PLC, and UBS AG - have pleaded guilty to violating U.S. law through their conduct in the foreign exchange market.
• The guilty pleas reflect widespread collusion in the FX market over several years, with the banks agreeing to pay more than $2.7 billion to the Department of Justice to resolve the DOJ's FX investigations.
• The Federal Reserve imposed fines of more than $1.6 billion on affiliates of the same five banks and a fine of $205 million on Bank of America Corporation for "unsafe and unsound practices."
• Barclays will also pay a $1.3 billion fine as part of settlements with the New York Department of Financial Services, the Commodity Futures Trading Commission, and the Financial Conduct Authority.
• The total fines imposed on the banks amount to approximately $5.8 billion, with seven banks having paid roughly $10 billion to resolve allegations of collusion in the FX market.
• In November 2014, the U.S. Commodity Futures Trading Commission, the U.S. Office of the Comptroller of the Currency, the U.K. Financial Conduct Authority, and the Swiss Financial Market Supervisory Authority (FINMA) levied $4.3 billion in fines on Bank of America, Citigroup, HSBC, JPMorgan, RBS, and UBS.
• Hausfeld, a global claimants' firm, has announced settlements with Bank of America, Citigroup, JPMorgan, and UBS in the FX antitrust litigation on behalf of the plaintiff class, totaling more than $800 million.

Statistics:

• Total fines imposed on the banks: $5.8 billion
• Total paid to resolve allegations of collusion in the FX market: $10 billion
• Number of banks that have pleaded guilty: 5
• Amount paid to the Department of Justice to resolve the DOJ's FX investigations: $2.7 billion
• Fine imposed by the Federal Reserve on affiliates of the same five banks: $1.6 billion
• Fine imposed on Bank of America Corporation: $205 million
• Fine imposed on Barclays: $1.3 billion

Sources:

• GlobeNewswire, "Hausfeld Announces Five Banks' Plea Agreements to Resolve Antitrust Claims in Foreign Exchange Benchmark Rates Litigation," May 20, 2015
• Comtex SmarTrend Alert, April 20, 2012, BAC @ $8.56
• Comtex SmarTrend Alert, April 20, 2012, JPM @ $43.15
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