Brussels – On Thursday, the European Union fined Citigroup, MUFG, Barclays, JP Morgan and Royal Bank of Scotland a blended €1.07billion for manipulating the multi-million dollar foreign exchange market.
The European Commission said that individual traders at the banks that are involved, formed two syndicates to manipulate the spot foreign exchange market for 11 currencies such as the pound, dollar and the euro.
The industry’s reputation has always been in question because of the rigging of patterns that have taken place in everyday financial transactions. A couple of banks have had to over the years, pay fines for their part in market manipulation occurring in forex.
“These cartel decisions send a clear message that the Commission will not tolerate conclusive behavior in any sector of the financial markets,” European Commission Margrette Vestager said in a statement. She said that most of them know each other on a personal level. They met on the train to have their discussions as most of them lived on the same side of town.
According to the five-year investigation, nine traders were scattered across banks exchanging crucial information and trading schedules in their private chatrooms where they sometimes co-ordinated trading strategies.
The Commission said in a statement, “The traders who were direct competitors, typically logged in to multilateral chatrooms and had extensive conversations about a variety of subjects, including updates on their trading activities.”
JP Morgan and RBS both said they were pleased to have sorted out the cases and that they had made significant changes to their controls. The EU continues to investigate banks for possible EU antitrust violations.