Major Banks Plead Guilty to Foreign Exchange Market Rigging
AI-generated context summary requested by a Free News Reader user. Sourced via Gemini from publicly available information — no paywalled content was accessed.
You hit a paywall. Here’s the context on this topic based on publicly available information. We did not access any paywalled content. View original article.
Major Banks Plead Guilty to Foreign Exchange Market Rigging
- In May 2015, five major global banks pleaded guilty to felony charges of conspiring to manipulate the foreign exchange market, resulting in over $5.7 billion in fines.
- The manipulation, which occurred between 2007 and 2013, involved traders from various banks, sometimes calling themselves "the cartel," using private chat rooms to coordinate their activities.
Full Summary — powered by AI
In a significant enforcement action on May 20, 2015, several of the world’s largest banks admitted to widespread manipulation of the foreign exchange (FX) market. Four banks—Citigroup, JPMorgan Chase, Barclays, and The Royal Bank of Scotland (RBS)—pleaded guilty to felony charges from the U.S. Department of Justice for conspiring to manipulate the price of U.S. dollars and euros. UBS also pleaded guilty to wire fraud and faced a separate penalty.
The total penalties imposed on these banks for rigging foreign exchange markets, along with other related offenses, reached approximately $5.7 billion. This included a record $2.5 billion in criminal fines from the U.S. Justice Department. Barclays alone was fined £1.5 billion by five regulators, including a record £284 million by the UK’s Financial Conduct Authority. The Federal Reserve also announced over $1.8 billion in fines against six major banking organizations for unsafe and unsound practices in the FX markets.
The manipulation scheme, which prosecutors stated occurred between late 2007 and early 2013, involved traders using private electronic chat rooms with coded language to coordinate their efforts. These traders, who sometimes referred to themselves as “the cartel,” shared confidential customer information and coordinated their trading strategies to manipulate benchmark currency prices, such as the 4:00 p.m. WM/Reuters rates. By colluding, they aimed to move exchange rates in directions favorable to their banks, which was detrimental to many others and generated substantial profits for the banks.
In addition to the criminal charges, the banks also faced civil penalties and cease and desist orders requiring them to improve oversight and controls over their FX activities. The Federal Reserve terminated a 2015 cease-and-desist order against Citi in October 2023, noting that the bank had adopted a firm-wide risk management program. Deutsche Bank also saw its 2017 consent order from the Federal Reserve terminated in August 2026, related to its involvement in the FX scandal.