BNP Paribas Settles NY Currency Rigging Investigation for $350M
BNP Paribas will pay the New York Department of Financial Services (DFS) $350M to settle a probe into allegations that it was involved in currency rigging in the bank’s foreign exchange business. In a statement, the French bank said that it “deeply regrets” the misconduct, which took place between ’07 and ’13.
The DFS said that over a dozen BNP Paribas sales people and traders in NY as well as other trading hubs rigged forex rates and took part in other illegal activities. BNP Paribas traders worked in online chat rooms with traders from competing companies, making fake trades and improperly sharing customer information that should have stayed confidential. Members of the bank’s sales team are also accused of misleading customers regarding prices.
Among the alleged misconduct cited by the DFS is that of a BNP Paribas trader in NY who is accused of not only rigging different currencies but also of executing bogus trades overnight to move rates and then frequently cancelling the trades within seconds of making them. In another example cited, one of the bank’s traders in Japan allegedly improperly disclosed customer information involving yen trading with several competitor traders.
Meantime, said the regulator, the bank failed to properly supervise its forex trading business. The regulator said that its foreign exchange rigging allowed BNP Paribas to profit while costing customers.
In other forex trading news, the ex-global head of foreign exchange spot trading at Barclays PLC (BARC) has been ordered to pay a $1.2M fine for his involvement in a currency manipulation scam. The Federal Reserve also has banned Christopher Ashton from the industry. The regulator said that the penalties are because Ashton did not to respond to allegations that he went into chat rooms to meet with competitors and rig the market with them.
According to the Fed, the ex-Barclays forex trader took part in private electronic chat rooms with other FX traders at rival banks almost every day between ’10 and ‘13. Together, they would allegedly discuss trading strategies, coordinate efforts, disclose client information, and rig benchmark currency rates to their advantage. These rates, which are used to set a currencies’ value compared to the currencies of other nations, are key in valuing financial derivatives and investment portfolios.
The Fed said that because of his involvement in currency rigging, Ashton made bigger bonuses. He was fired from Barclays in 2015. That was the same year that Barclays admitted to criminal charges and was ordered by the Fed to pay $342M in penalties for its traders’ misconduct. It also paid $384M to settle a class action securities case related to these issues. Barclays has been dealing with other civil securities fraud lawsuits related to currency rigging.
Securities Fraud Cases
At The SSEK Partners Group, our financial fraud attorneys work with high net worth individual investors and institutional investors in trying to get back their financial fraud losses. Please contact us today to request your free, no obligation case consultation. We have helped thousands of investors over the years. Contact us today.
BNP Paribas to pay $350 million to settle New York currency-rigging probe, Reuters, May 24, 2017
Federal Reserve imposes $1.2 million fine and permanent ban on employment against former Barclays Bank PLC employee, Federal Reserve, May 19, 2017