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5 big banks fined for rigging global economy

blake0812

blake0812

Senior member
"Five of the world's biggest banks are expected to be hit with a combined bill of more than $5 billion and criminal charges on Wednesday in a settlement with U.S. and British authorities over rigging of currency markets.

It will mark another dark day for an industry trying to put past sins behind it and brings the total in penalties some big banks will pay for their traders allegedly manipulating the $5-trillion-a-day foreign exchange market to about $10 billion.

U.S. banks JPMorgan and Citigroup and Britain's Barclays and Royal Bank of Scotland are expected to plead guilty to criminal charges with the U.S. Department of Justice related to forex manipulation, people familiar with the matter said.

It would be unprecedented for the parent companies or main banking arms of so many major banks to plead guilty to criminal charges in a coordinated action. JPMorgan and Citigroup would be the first major U.S. banks to plead guilty to criminal charges in decades.

Swiss bank UBS is expected to avoid a criminal charge after getting immunity for alerting authorities to a possible problem. But it faces a criminal charge over the rigging of benchmark (Libor) interest rates, two people familiar with the matter said.

That stems from an agreement with the DoJ in its December 2012 Libor settlement not to commit more offences. It will also pay a $200 million fine, the two sources said.

Barclays is also expected to reach settlements with other British and U.S. regulators, which means its penalties could be significantly higher than the other banks and top $2 billion.

Barclays has set aside $3.2 billion to cover any forex fines, and other banks also have provisions for settlements.

Individuals at Barclays could also be held accountable if there is evidence of bad conduct, New York's banking regulator Benjamin Lawsky told Reuters on Tuesday, echoing a warning he made last week.

Britain's Financial Conduct Authority and some U.S. authorities fined a group of six banks $4.3 billion in November for forex manipulation, but Barclays did not join that deal due to complications with its regulator in New York.

The impact of guilty pleas by the parent companies or main banking arms of major banks is uncertain, and could jeopardise their U.S. operations.

The banks are seeking assurances from U.S. regulators they will not be barred from certain businesses if they plead guilty, several sources familiar with situation said.

The DoJ has been negotiating with the banks for months over how to resolve the forex allegations. Transcripts of online chat rooms made public in November showed how traders shared confidential information about client orders and otherwise conspired to benefit their own transactions.

The timing of a settlement could still slip if there is a last minute hitch.

Some authorities will continue to look at whether computer programmes used in trading platforms could have rigged forex prices, which is likely to be excluded from Wednesday's deal."
http://www.reuters.com/article/2015/05/19/banks-forex-settlement-idUSL1N0YA2U320150519

http://www.nytimes.com/2015/05/21/b...ency-and-interest-rate-cases.html?smid=tw-bna

http://uk.reuters.com/article/2015/02/13/uk-iceland-bankers-idUKKBN0LH0OC20150213


My question is, why are these people given a slap on the wrist? These people should be in prison for their crimes.
 
blake0812 said:
My question is, why are these people given a slap on the wrist? These people should be in prison for their crimes.
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Because that's the world we live in.

Easier to accept if you understand who really runs DC (The Big Banks).


Real power is being show here, ie) all of us would be in jail if we did what these guys did.
 
FerrelGeek said:
$5B to these entities is like pocket lint. They're laughing at all of us peasants.
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They just consider it the cost of doing business. Imagine if the only penalty for robbing a bank of $10,000 was a $1,000 fine but you still get to keep the original $10K you stole. That's basically what happens to the big banks when the break the law.
 
Darwin333 said:
They just consider it the cost of doing business. Imagine if the only penalty for robbing a bank of $10,000 was a $1,000 fine but you still get to keep the original $10K you stole. That's basically what happens to the big banks when the break the law.
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this.
 
Actually its not really "the banks" leading the dirty dealing but employees at the banks going down their own path (like Obama and Holder - who love to fine banks and hope they dont go straight )


"Starting as early as Dec 2007, currency traders at several multinational banks formed a group dubbed 'The Cartel,' " Lynch said. "It is perhaps fitting that those traders chose that name, as it aptly describes the brazenly illegal behavior they were engaging in on a near-daily basis...."By agreeing not to buy or sell at certain times the traders protected each other's trading positions by withholding supply of or demand for currency and suppressing competition in the FX market," ...


JPMorgan CEO Jamie Dimon called the investigation findings "a great disappointment to us," and said "we demand and expect better of our people."

"The lesson here is that the conduct of a small group of employees, or of even a single employee, can reflect badly on all of us, and have significant ramifications for the entire firm," said Dimon.

In Zurich, UBS Chairman Axel Weber and CEO Sergio Ermotti said the Swiss bank has taken "appropriate disciplinary actions" against a small number of employees involved in "unacceptable" behavior.

Barclays CEO Antony Jenkins said he shared the frustration of shareholders and colleagues "that some individuals have once more brought our company and industry into disrepute."


http://www.usatoday.com/story/money/2015/05/20/billions-in-bank-fx-settlements/27638443/
 
MongGrel said:
You actually think the whole "Cartel" thing wasn't influenced by the guys upstairs with 5 of the biggest banks on the planet involved ?

Give me a break.
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There are SO many government tards coming up with so many reams of regulations I don't think many people, institutions etc even know what they are doing anymore. Turn left you violate something, turn right you violate something. Actually I know 100% that financial insitutions don't even really know where they stand things move so fast. Check out the movie "Margin Call" - based on a some analysts at a financial in 2008 realizing they were billions more in debt than they knew.
 
I hear about it on a daily basis, my wife has moved into that area a few years ago from managing a cruise agency to a reputable financial investment company.
 
MongGrel said:
I hear about it on a daily basis, my wife has moved into that area a few years ago from managing a cruise agency to a reputable financial investment company.
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You do? I never hear about it. The differential in rates was small and overall, a wash, to the global economy. Relative to what was going on then it's puny.

Not that it shouldn't be punished, but overall this isn't that big of a deal. Compared to what Angelo Mozillo did it was nothing.
 
Banks don't commit crimes.

People do.

That said, if you're in control of large percentages of a modern economy, your Get-Out-Of-Jail card is built into your job title of "Executive X" of "C̶r̶i̶m̶i̶n̶a̶l̶ ̶O̶r̶g̶a̶n̶i̶z̶a̶t̶i̶o̶n̶ Corporation Y".

All Hail FreeMarket™
 
soulcougher73 said:
Penalty wont be big enough for them to stop doing it. They will take the fine and keep on making money.
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Which is why people should be prosecuted. Corporations don't conspire and break laws, people within those corporations conspire and break laws. Where those conspiracies are criminal, those people should be prosecuted individually. We'd have a lot fewer such conspiracies (and a lot fewer "good Germans") if people were held personally accountable for their actions. Fine the corporations, jail the perpetrators. They all know they can make more money a hell of a lot easier than they can make more time.
 
werepossum said:
Which is why people should be prosecuted. Corporations don't conspire and break laws, people within those corporations conspire and break laws. Where those conspiracies are criminal, those people should be prosecuted individually. We'd have a lot fewer such conspiracies (and a lot fewer "good Germans") if people were held personally accountable for their actions. Fine the corporations, jail the perpetrators. They all know they can make more money a hell of a lot easier than they can make more time.
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Exactly if we started treating bankers like drug dealers we'd see change. Jail a few for crimes, confiscate their assets, then bar them from working in the industry or profiting from their crime. We would see a change.
Honestly I think we all agree Bernie Madoff should be in jail, what did he do that is so different than this?
 
LegendKiller said:
You do? I never hear about it. The differential in rates was small and overall, a wash, to the global economy. Relative to what was going on then it's puny.

Not that it shouldn't be punished, but overall this isn't that big of a deal. Compared to what Angelo Mozillo did it was nothing.
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Mozillo wasn't alone. The whole industry was shot through with it, including the big financial firms. I figure BoA bought Countrywide rather than allow for the disclosures required in bankruptcy. They ate the evidence so to speak.
 
Jhhnn said:
Mozillo wasn't alone. The whole industry was shot through with it, including the big financial firms. I figure BoA bought Countrywide rather than allow for the disclosures required in bankruptcy. They ate the evidence so to speak.
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Sure, but if you can't hold the big guys accountable, then who are you going to hold accountable?

A lot of this stuff is just window dressing. The LIBOR rigging is nothing. If a bank fixed it low one day the borrower paid less and lender got less. In the next day they might have fixed it high and it went the other way. As far as fixing it during the crisis, a lot of that was merely liquidity and prevention of a panic.

That's why nobody in the financial services industry, even on the buyside, care about this all that much. It's regulators making a job for themselves and diverting people away from the truly guilty and criminal.
 
LegendKiller said:
Sure, but if you can't hold the big guys accountable, then who are you going to hold accountable?

A lot of this stuff is just window dressing. The LIBOR rigging is nothing. If a bank fixed it low one day the borrower paid less and lender got less. In the next day they might have fixed it high and it went the other way. As far as fixing it during the crisis, a lot of that was merely liquidity and prevention of a panic.

That's why nobody in the financial services industry, even on the buyside, care about this all that much. It's regulators making a job for themselves and diverting people away from the truly guilty and criminal.
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I think the future is more important than the past & that all the recriminations are merely distractions from that. As you say, given that prosecution won't be forthcoming, real answers lie in structural changes to the industry to prevent recurrence.

For as long as they held sway, New Deal constraints on the financial industry did that a helluva lot better than methods employed during the Bush years. Those constraints were instituted in response to the practices of the 20's that spawned the Great Depression, a recurrence of which we narrowly escaped in 2008-2009. Compared to that, what we've done to protect ourselves since then are weak sauce indeed.
 
finglobes said:
There are SO many government tards coming up with so many reams of regulations I don't think many people, institutions etc even know what they are doing anymore. Turn left you violate something, turn right you violate something. Actually I know 100% that financial insitutions don't even really know where they stand things move so fast. Check out the movie "Margin Call" - based on a some analysts at a financial in 2008 realizing they were billions more in debt than they knew.
Click to expand...


Wait, you are trying to argue that because of how many regs they have that they might not have known that this was illegal? Really? Are you in anyway familiar with what these assholes did???
 
werepossum said:
Which is why people should be prosecuted. Corporations don't conspire and break laws, people within those corporations conspire and break laws. Where those conspiracies are criminal, those people should be prosecuted individually. We'd have a lot fewer such conspiracies (and a lot fewer "good Germans") if people were held personally accountable for their actions. Fine the corporations, jail the perpetrators. They all know they can make more money a hell of a lot easier than they can make more time.
Click to expand...

Very much this but imho it doesn't go far enough. Some of the offenders in question are multiple criminal offenders. If they were people the 3 strike rule would apply and they would likely be in jail for life without the possibility of parole. After a corporation shows a pattern of continuously and blatantly breaking the law their charters should be revoked.

With that said, I'd be absurdly happy with just handcuffs but that has been proven over and over that it ain't going to happen. Those assholes are above the law and they know it. All these fines are is a cost of doing business, they rarely equate to a portion of the gains they made from their illegal activities. The .gov is actually incentivizing these activities by allowing them to remain profitable and no personal accountability.
 
LegendKiller said:
Sure, but if you can't hold the big guys accountable, then who are you going to hold accountable?

A lot of this stuff is just window dressing. The LIBOR rigging is nothing. If a bank fixed it low one day the borrower paid less and lender got less. In the next day they might have fixed it high and it went the other way. As far as fixing it during the crisis, a lot of that was merely liquidity and prevention of a panic.

That's why nobody in the financial services industry, even on the buyside, care about this all that much. It's regulators making a job for themselves and diverting people away from the truly guilty and criminal.
Click to expand...

That's an interesting hypothesis, would you care to go in to a bit more detail?
 
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