E.U. fines Major Banks $1.2 Billion for Involvement in Forex Rigging

The European Union (EU) on Thursday imposed hefty fines on several major banks around the globe for their part in a scheme that rigged the foreign exchange market.

The banks roped into the plot include Barclays, JP Morgan, Citigroup, Japan’s MUFG and the Royal Bank of Scotland. Together, the five banks have been fined a total of 1.07 billion euros (approximately $1.2 billion).

The move by the E.U follows a similar trend that has seen banks all over the world face fines worth billions of dollars for participating in elaborate schemes that rigged benchmarks in the multi-trillion dollar FX market.

According to the European Commission, traders at these banks worked together in two cartels. The individuals were then able to variously manipulate the spot forex market, involving currencies like the U.S. dollar, the euro, and the British pound.

The European Commission said that it did not fine Swiss bank UBS for its role in exposing the cartels, with investigations taking five years. It determined that the cartels comprised nine traders from the said banks, and were spread into two cartels- the “Essex Express” and the “Three Way Banana Split.”

Their activities ran between December 2007 and January 2013 and involved swapping such information as client orders and bid-ask spreads.

And the EC has said that its decision on these cartels sends “a clear message” to all players in the financial markets.

Those in the “Three Way Banana Split” cartel were traders from Barclays, the RBS, UBS, Citigroup, and JP Morgan. Collectively they received a combined 811.2 million euros in fines. Citigroup received the stiffest penalties, having been fined a total of 310.8 million euros.

The “Essex Express” cartel brought together traders from Barclays, RBS, UBS, and MUFG. They E.U fined them a total of 257.7 million euros, with Barclays receiving the largest fine at 94.2 million euros.

Since allegations first surfaced in 2013, authorities in the U.S. and in Britain have fined seven top banks nearly $10 billion. The fines relate to their involvement in the manipulation that bedeviled the foreign exchange market in almost half a decade.