Six banks will pay a combined $5.6 billion to settle charges that they manipulated foreign-exchange markets.
Four of the banks — Barclays, Citigroup, J.P. Morgan Chase and Royal Bank of Scotland — will pay a combined $2.52 billion to the U.S. Justice Department after pleading guilty to conspiring to manipulate the price of U.S. dollars and euros exchanged in the FX spot market, Attorney General Loretta Lynch announced in a news conference Wednesday. Citicorp will pay $925 million to the DOJ; Barclays, $650 million; J.P. Morgan, $550 million; and RBS, $395 million.
UBS also pleaded guilty to manipulating the London interbank offered rate and other benchmark interest rates and will pay a $203 million penalty; the Justice Department said UBS breached its December 2012 agreement with the department resolving a LIBOR investigation.
Barclays, Citigroup, J.P. Morgan, RBS and UBS said they will apply for prohibited transaction exemptions from the Department of Labor to retain their status as qualified professional asset managers to continue managing retirement plan assets, according to court documents. As of late Wednesday afternoon, J.P. Morgan and Citigroup had filed for the exemption, said Michael Trupo, DOL spokesman.
In addition, the five banks along with Bank of America will pay a total of more than $1.8 billion in fines to the Federal Reserve, according to a news release from the Fed — $342 million each for Barclays, Citigroup, J.P. Morgan Chase and UBS; $274 million for RBS; and $205 million for Bank of America.
Separately, Barclays will pay a combined $515 million to the Commodity Futures Trading Commission to settle two separate charges, £284 million ($447 million) to the U.K.’s Financial Conduct Authority and $485 million to the New York State Department of Financial Services over forex manipulation charges, according to separate news releases from the three agencies.
Barclays was not part of a combined $4.4 billion in settlements announced in November with the CFTC, U.K.’s Financial Conduct Authority, the Office of Comptroller of the Currency, and Swiss regulators. Those settlements involved Citigroup, HSBC, J.P. Morgan Chase, Royal Bank of Scotland, UBS and Bank of America.
“The charged conspiracy fixed the U.S. dollar-euro exchange rate, affecting currencies that are at the heart of international commerce and undermining the integrity and the competitiveness of foreign currency exchange markets which account for hundreds of billions of dollars worth of transactions every day,” said William Baer, assistant attorney general, at the news conference. “The seriousness of the crime warrants the parent-level guilty pleas by Citicorp, Barclays, J.P. Morgan and RBS.”