5 Banks To Plead Guilty To Criminal Rigging Charges, Pay $5.6 Billion For Manipulating Markets

As the live webcast from US AG Loretta Lynch indicates, moments ago the DOJ announced five global banks including Citi, J.P. Morgan, Barclays, RBS would plead guilty to criminal charges to conspiring to manipulate FX Prices, and would pay some $5.6 billion in combined penalties to resolve a long running U.S. investigation into whether traders at the banks colluded to move foreign currency rates in directions to benefit their own positions.

More from the WSJ:

Four of the banks, J.P. Morgan Chase & Co., Barclays PLC, Royal Bank of Scotland Group PLC, and Citigroup Inc., will plead guilty to conspiring to manipulate the price of U.S. dollars and euros, authorities said.

 

The fifth bank, UBS AG , received immunity in the antitrust case, but will plead guilty to manipulating the Libor benchmark after prosecutors said the bank violated an earlier accord meant to resolve those allegations of misconduct. UBS will also pay an additional Libor-related fine.

 

Bank of America Corp. will also pay a $205 million penalty to the Fed to resolve the regulator’s foreign exchange probe. Bank of America didn’t face similar action from the Justice Department.

 

Authorities said euro dollar traders at the banks, who were self-described members of “The Cartel” communicated through coded language in an online chat room to coordinate attempts to move rates set at 1:15 and 4 p.m.

Turns out ratting our criminal peers out does pay after all:

One UBS trader also engaged in the same collusive behavior in the euro and dollar market, but the bank wasn’t charged over that conduct because it had obtained immunity by being the first bank to report the possible antitrust violations.

Live DOJ webcast below.


Broadcast live streaming video on Ustream

And  yet:

No traders have yet been criminally charged over the conduct, but New York’s financial regulator said it required Barclays to fire eight employees in connection with the resolution. Investigations into individuals are continuing, according to government officials.

Don't be surprised if despite the guilty criminal pleas, nobody goes to prison yet again.

In any event, we now know that aside from Libor, FX, gold, stocks and treasuries, nothing else is manipulated.

Our final question: did the DOJ accidentally forget to charge the Bank of England and its former employee Martin Mallett who was fired for FX rigging?  Recall:

Martin Mallett was dismissed by the Bank of England yesterday for “serious misconduct relating to failure to adhere to the Bank’s internal policies,” according to a statement by the central bank today.

 

Mallett, who worked at the bank for almost 30 years, had concerns from as early as November 2012 that conversations between traders right before benchmarks were set could lead to the rigging of those rates, according a report today by Anthony Grabiner, who was commissioned by the central bank to look into what its officials knew about practices under investigation around the world. Mallett was “uncomfortable” with the traders’ practices, yet he didn’t escalate these concerns, Grabiner said.

 

“We’re disappointed because we hold ourselves to the highest standards -- we have an outstanding markets division,” BOE Governor Mark Carney said at a briefing in London today. “What Lord Grabiner found was that our chief dealer was aware of circumstances in the market that could facilitate or lead to improper behavior by market participants.”

Eagerly awaiting for the answer.