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EU Fines HSBC, Credit Suisse, Other Lenders Fined By EU On Charges Of Running A 'Sterling Lads' Forex Cartel


12/02/2021


EU Fines HSBC, Credit Suisse, Other Lenders Fined By EU On Charges Of Running A 'Sterling Lads' Forex Cartel
Barclays, Credit Suisse, HSBC, and NatWest were slapped fines totalling 344 million euros ($390 million) by antitrust officials of the European Union on Thursday over charges of manipulating the foreign exchange spot trading market.
 
UBS narrowly managed to avoid a 94 million euro penalty as it had informed the European Commission about the cartel, which was organised and operated using a online chat-room called "Sterling Lads". The cartel's concentration, according to the EU competition regulator, was on FX spot trading of G10 currencies.
 
The highest penalty was slapped on HSBC, which was 174.3 million euros, followed by Credit Suisse, which was imposed a fine of 83.3 million euros, Barclays with a fine of 54.3 million euros, and RBS was handed over a fine of 32.5 million euros.
 
In exchange for a reduction in the penalty, Barclays, HSBC, and RBS confessed guilt of the charges. After undergoing a rebranding last year, RBS is now known as NatWest.
 
There were no comments on the issue available from Barclays, Credit Suisse and HSBC.
 
NatWest stated in a statement that the misbehaviour occurred nearly a decade ago in a single chatroom and involved a former employee. It also said that the company's culture and procedures have fundamentally changed over the last ten years since the incident had happened.
 
"This is a legacy matter where UBS was the first bank to disclose potential misconduct and we are pleased the matter is resolved," UBS said.
 
The currency manipulation was done via the chatroom, according to the EU competition enforcer.
 
Semi Grumpy Old Men, Three Way Banana Split, Two and a Half Men, and Only Marge were the names given to the chatrooms by a previous cartel that was granted sanction in 2019 and involved some of the same lenders.
 
According to the Commission, the traders engaged in exchanging of sensitive information and trading plans between themselves, as well as occasionally coordinating their trading tactics on whether and when to sell or purchase the currencies in their portfolios via the chatroom.
 
The sanctions are the most recent to hammer banks, which have been smacked with billions of euros in penalties throughout the world over the last decade, notably for distorting benchmarks used in many daily financial transactions.
 
"Today we complete our sixth cartel investigation in the financial sector since 2013 and conclude the third leg of our investigation into the foreign exchange spot trading market," EU antitrust chief Margrethe Vestager said in a statement.
 
The EU antitrust authorities penalised Barclays, Citigroup, JP Morgan, MUFG, and RBS a total of 1.07 billion euros in May 2019 for manipulating the foreign currency market via two cartels, one from 2007 to 2013 and the other from 2009 to 2012.
 
(Source:www.usnews.com)