EU fines five banks $1.2 billion for foreign exchange rigging

EU discovers that large numbers of FX traders live in Essex

EU fines London banks £1BILLION - Barclays and state-owned RBS among firms hit

Five banking giants including Barclays and RBS have landed a combined €1.07bn (£940m) fine for taking part in two foreign exchange trading cartels named "Essex Express" and "Three Way Banana Split".

The two settlement decisions are the result of an investigation into Barclays, the Royal Bank of Scotland (RBS), Citigroup, JPMorgan, UBS and MUFG Bank in relation to 11 currencies, including the euro, dollar, sterling and yen. One chatroom was called the "Essex Express 'n the Jimmy" because all but one of the traders, James, lived in Essex and met on a train to London.

Commissioner Margrethe Vestager, in charge of competition policy said:"The behaviour of these banks undermined the integrity of the sector at the expense of the European economy and consumers". "These cartel decisions send a clear message that the commission will not tolerate collusive behaviour in any sector of the financial markets".

Swiss bank UBS was involved but not fined after it alerted the EC about the two cartels.

UBS Group escaped a fine because it was the first to tell regulators about the collusion.

Scott & Scott, a US law firm that has set up shop in Britain after its success in the USA, where it was lead counsel in the action against 15 banks, said it had been waiting for the European Commission penalties. Credit Suisse Group was separately charged by the European Union over FX collusion previous year.

The penalties related to trading in 11 currencies from 2007 to 2013.

The banking industry has been hit with billions in fines worldwide over the last decade for rigging benchmarks used in many day-to-day financial transactions, and are now at risk of private lawsuits. Former US attorney general Loretta Lynch in 2015 said the banks engaged in a "brazen display of collusion" to game markets.

A JP Morgan spokesperson stated: "We are pleased to resolve this historical matter, which relates to the conduct of one former employee. We have since made significant control improvements", a spokesman for JPMorgan said in an emailed statement.

Citigroup declined to comment. They would sometimes agree to "stand down" or stop a trading activity to avoid interfering with another trader in the group.

According to Brussels, the banks formed those cartels in order to influence 11 different currencies, including the euro, USA dollar, pound sterling, Japanese yen, Swiss franc, and others.

Detailing the findings today, the Commission imposed a fine of £708,956,347 (€811,197,000) on Barclays, RBS, Citigroup and JPMorgan.

The EU is continuing to investigate banks for possible EU antitrust violations.

Groups of traders from banks including Barclays and Royal Bank of Scotland (RBS) worked together in secret online chatrooms to deceive the markets. HSBC received questions from regulators in October and the investigation is at an early stage, it said.

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