5 Major Banks fined for Forex manipulation

Five major banks will pay fines up to 6 billions of dollars for manipulating the foreign exchange market in a settlement expected to be unveiled Wednesday by US and British regulators.

The banks are American giants JPMorgan Chase and Citigroup, British banks Barclays and Royal Bank of Scotland, and UBS of Switzerland.

The sharp penalties are expected from Britain's Financial Conduct Authority, the US Department of Justice, the US Federal Reserve, the US Commodity Futures Trading Commission and the New York Department of Financial Services.

Regulators have accused the banks of conspiring to manoeuvre the US$5.3-trillion-per-day foreign exchange market in ways that cheated clients and increased their own profits.

Citicorp, Barclays, JPMorgan and RBS each have agreed to plead guilty to a one-count felony charge of conspiring to fix prices and rig bids for U.S. dollars and euros exchanged in the FX spot market in the United States and elsewhere.  Each bank has agreed to pay a criminal fine proportional to its involvement in the conspiracy: 

• Citicorp, which was involved from as early as December 2007 until at least January 2013,has agreed to pay a fine of US$925 million;
• Barclays, which was involved from as early as December 2007 until July 2011, and then from December 2011 until August 2012, has agreed to pay a fine of US$650 million;
• JPMorgan, which was involved from at least as early as July 2010 until January 2013, has agreed to pay a fine of US$550 million; and
• RBS, which was involved from at least as early as December 2007 until at least April 2010, has agreed to pay a fine of US$395 million.

Those four banks, along with UBS, were also fined US$1.6 billion by the Federal Reserve.UBS will also pay a US$203 million penalty for manipulating the Libor rates, and Barclays will pay an additional US$1.3 billion to settle similar claims.

At least four of five banks in Wednesday's agreement are expected to plead guilty to a US criminal antitrust charge: JPMorgan, Citigroup, Barclays and RBS.

A guilty plea typically restricts a bank's operations in the US, but regulators have been working on waivers to ensure customers are not harmed, according to people familiar with the matter.