May 20, 2015

Big banks to pay $5.7B over currency price-fixing

Five banks – Barclays, JPMorgan Chase, Citigroup, Royal Bank of Scotland and UBS – will pay roughly $5.7 billion in fines, and four pleaded guilty to settle charges of foreign currency price-fixing, according to reports Wednesday.

UBS is expected to plead guilty to "rigging benchmark interest rates," Reuters reported. It will also pay a $203 million criminal penalty for breaching a 2012 non-prosecution agreement with the Justice Department over Libor.

Of those pleading guilty to foreign currency manipulation:

  • JPMorgan Chase will pay $550 million in fines;
  • Citigroup will pay $925 million in fines;
  • Barclays will pay $650 million in criminal penalties; and
  • Royal Bank of Scotland will pay $395 million in fines.

The $5.7 billion also includes $1.6 billion in fines separately imposed on the banks by the Federal Reserve Board. The Fed also fined Bank of America $205 million for "unsound practices in foreign exchanges," Reuters reported.

Last year, FDIC filed suit against 16 of the largest banks, including Citigroup, over suspected Libor manipulation. In 2013, NCUA announced it would pursue recoveries from banks and other firms in the U.S. and around the world for their part in Libor manipulation and the sale of mortgage-backed securities that helped bring down five corporate credit unions – U.S. Central, WesCorp, Members United, Southwest and Constitution.

NCUA filed a suit against 13 international banks, and filed against Morgan Stanley & Co. Inc. and eight others, over the sale of nearly $2.4 billion in residential MBS to Southwest and Members United.

NAFCU has encouraged NCUA to pursue all means available to mitigate the impact of corporate stabilization on federally insured credit unions.