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Pennsylvania
Five banks have been fined a total of 1.07 billion euros by the European Commission for having formed illicit cartels aimed at rigging the foreign exchange market.
Four banks of the "Banana Split" cartel – Barclays, RBS, Citigroup and JP Morgan – have been fined 811 M €.
Three other banks of the cartel "Essex Express" – Barclays, RBS and MUFG – were fined 258 M €.
A sixth bank, UBS, has excused financial penalties for revealing the existence of cartels.
The European Commission has stated that the rigging of the market took place from 2007 to 2013.
Competition Commissioner Margrethe Vestager said the banks' behavior "undermined the integrity of the sector at the expense of the European economy and consumers".
Similar fines for manipulating foreign exchange markets were imposed in 2014 by UK, US and Swiss regulators.
Circles of trust
The Commission's investigation, which opened in September 2013, revealed that some foreign exchange operators, using online chat rooms, exchanged trading plans and sometimes coordinated their trading strategies.
"Most traders participating in the chat rooms have known each other in their personal capacity," said the Commission.
"For example, one of the chat rooms called Essex Express' n the Jimmy because all the traders except 'James' lived in Essex and met on a train to London.
"Some marketers created the chat rooms and then invited themselves, depending on their business activities and personal affinities, to join, thus creating closed circles of trust."
The information exchanged by the operators concerned:
- Outstanding customer orders (customer names, currencies and amounts involved)
- Prices applicable to specific transactions
- Open risk positions in different currencies
- Other details of ongoing or planned exchanges.
Their discussions "allowed them to make informed market decisions as to the sale or purchase of the currencies in their portfolios and when," the Commission said.
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