Last Wednesday, the accused banks Citi Group, RBS, JP Morgan and Barclays have finally plead guilty of violating the US antitrust laws and got levied another round of fines for the collusion of forex market. Together with the already levied fines for FX rigging back in November 2014, the world has witness a surge of penalties totaling over $10 billion. Reportedly, these banks have shamelessly advocated online Chatrooms for FX rigging. As some of these Global FX rigging Chat rooms conversations have been revealed.
Traders of Citi, JP Morgan, Barclays and RBS have used online chat room to exploit the benchmark exchange rates. They utilized “coded language” for the purpose of coordinated trading times to increase profits, while withheld themselves from bids when there was an unfavorable impact or a risk on others in the chat room. Once these conversations within these illicit chat rooms were investigated, the FED was shocked that these banks failed to monitor the fraudulent activities that took place, as traders were openly sharing confidential information from one bank to the other.
“ If you ain’t cheating, you ain’t trying ”
Most recent investigations into the Global FX rigging case has exposed that fraudulent activities took place not only in the influential chat rooms but was spread through emails, instant messages and many other communication tools. As the regulators study tens of thousands of messages, they have also stumbled upon alarming messages from bank executives. Indecently, the former vice president of Barclays New York branch wrote the following in an online chat room back in 2010: “ If you ain’t cheating, you ain’t trying ”.
Other examples of the startling evidence derived from the online chat rooms are: “The less competition, the better,” written by Barclays Forex trader in a 2009 discussion. An additional example is: “ shouldn’t put this on perma chat”, as commented by a JP Morgan trader in one of the alarming chat rooms.
Condemnation and justifications
Evidently, the various head figures of the accused banks have pointed fingers to the responsible ones, while apologizing for the misconduct. In a statement by Barclays CEO, Mr. Anthony Jenkins expressed remorse: “we deeply regret that the misconduct occurred, it is a breach of our bank’s values.”
Some of the other CEO’s took a more harsh stance, such as the CEO of UBS, Mr. Sergio P. Ermotti blamed the malpractice to “a small number of employees”, whilst stating that the firm has made: “significant investments to strengthen our control framework and compliance programs”. The chairman at RBS, Mr. Philip Hampton said to: “strongly condemn the actions of those responsible”.
Meanwhile Share Prices hike
Having agreed upon the fines levied by various regulating instances, it is surprising that some of the accused banks have listed an increment in its share prices. It could be the fact that the indicted banks had set aside much more funds for the fines than actually needed. Questioning if the imposed fines are confirming the malpractices and if it shouldn’t be higher.
Resultantly, the indicted banks have immediately banned these illicit chat rooms and laid off the traders that have been signaled by the regulators to be involved in the schemes. However, it is an endless process and together with the shift of litigation to European courts by Hausfeld, more and more cases will be revealed in the upcoming period.