European Union has fined four banks $390M for colluding in a foreign exchange spot trading cartel that allowed them to beat the inherent risks of currency deals. These happened to be Barclays, Credit Suisse, RBS and HSBC. Even the cartel of foreign exchange spot trades was also not spared.
The Commission also revealed that traders representing five banks exchanged sensitive information through a chat room called Sterling Lads.
UBS was spared a fine because it exposed the cartel, as per the European Commission, the EU’s executive arm. HSBC received the biggest fine, almost $200 million, but Credit Suisse, RBS and Barclays got smaller penalties.
The commission called this “collusive behavior”. “The collusive behavior of the five banks undermined the integrity of the financial sector at the expense of consumers and the economy,” Commission Vice President Margrethe Vestager said in a statement.
A major focus of the investigation was the trading of G10 currencies, which included the British Pound – or sterling -, as well as the Euro, the US dollar, Japanese Yen, and the Swiss Franc. UBS was spared a fine of $106 million as it cooperated with the EU probe.
Some of their customers include asset managers, pension funds, major companies and other banks. The investigation found that some traders from the five banks discussed their plans and sometimes coordinated their trading strategies through the Sterling Lads chatroom.
