Banks including JPMorgan Chase & Co. (JPM), Citigroup Inc. (C) and Morgan Stanley (MS) have been notified regulators are preparing enforcement actions on currency rigging, people familiar with the investigation said. Talks are progressing between banks, the U.S. Federal Reserve and the Office of the Comptroller of the Currency to settle investigations into alleged manipulation of foreign-exchange markets, according to two people, who asked not to be identified because the talks are private. Some firms have received so-called 15-day letters outlining the agencies’ findings and warning that enforcement actions are likely, the people said. Enforcement actions can range from cease-and-desist orders to fines to banning bankers from the industry. The letters typically detail the investigators’ findings and give recipients about 15 days to offer a written defense. Such notices usually open a final stage of settlement negotiations. U.S. regulators are coordinating with the U.K.’s Financial Conduct Authority to settle some of the probes by November, according to two people. The FCA has scheduled meetings as soon as next month to begin negotiations with some banks on penalties as part of settlement talks it’s having with Barclays Plc, Citigroup, HSBC Holdings Plc, JPMorgan, Royal Bank of Scotland Group Plc and UBS AG. Some investigations are taking longer, and talks with firms such as Bank of America Corp. haven’t progressed as far as a 15-day letter, according to one person. WM/Reuters Rate Firms have cooperated with FCA and U.S. banking regulators, conducting their own investigations and handing over their findings, helping to speed up probes that just began last year. Authorities around the world have been looking into allegations that dealers at the biggest banks traded ahead of their clients and colluded to rig the WM/Reuters rate, a benchmark used by pension funds and money managers to determine what they pay for foreign currencies. More than 25 traders have been fired, suspended or put on leave after the allegations became public last year. Spokesmen for the banks, the OCC, Fed and FCA all declined to comment on the status of the investigations. Unlike in the U.S., the FCA hasn’t informed several banks of the case it has against them, some of the people said. Still unclear are the size of the fines that might be involved, according to two people. Sanford C. Bernstein Ltd. analyst Chirantan Barua said in a note today that Barclays could incur fines of as much as 700 million pounds ($1.2 billion) to resolve the currency-rigging probes. Citigroup, Deutsche Bank AG, Barclays and UBS are the top four currency dealers, according to Euromoney Institutional Investor Plc’s annual survey. bloomberg/news/2014-08-13/banks-said-to-get-enforcement-letters-in-fx-rigging-probe.html
Posted on: Thu, 14 Aug 2014 01:47:12 +0000
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