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Breaking - 5 Banks to Pay Billions and Plead Guilty in Currency and Interest Rate Case
http://www.nytimes.com/2015/05/21/business/dealbook/5-big-banks-to-pay-billions-and-plead-guilty-in-currency-and-interest-rate-cases.html?_r=0<snip>
Adding another entry to Wall Street’s growing rap sheet, five big banks have agreed to pay more than $5 billion and plead guilty to multiple crimes related to manipulating foreign currencies and interest rates, federal and state authorities announced on Wednesday.
The Justice Department forced four of the banks — Citigroup, JPMorgan Chase, Barclays and the Royal Bank of Scotland — to plead guilty to antitrust violations in the foreign exchange market as part of a scheme that padded the banks’ profits and enriched the traders who carried out the plot. The traders were supposed to be competitors, but much like companies that rigged the price of vitamins and automotive parts, they colluded to manipulate the largest and yet least regulated market in the financial world, where some $5 trillion changes hands every day, prosecutors said.
Underscoring the collusive nature of their contact, which often occurred in online chat rooms, one group of traders called themselves “the cartel,” an invitation-only club where stakes were so high that a newcomer was warned, “Mess this up and sleep with one eye open.” To carry out the scheme, one trader would typically build a huge position in a currency and then unload it at a crucial moment, hoping to move prices. Traders at the other banks agreed to, as New York State’s financial regulator put it, “stay out of each other’s way.”
By Channon Hodge, Aaron Byrd and David Gillen 2:30
The banks also misled their clients about the price of currencies, the federal and state authorities said, imposing “hard mark-ups,” which one Barclays employee described as the “worst price I can put on this where the customers decision to trade with me or give me future business doesn’t change.” Or, to put their mission in the starkest of terms, the employee said: “If you ain’t cheating, you ain’t trying.”
As part of the criminal deal with the Justice Department, a fifth bank, UBS, will plead guilty to manipulating the London Interbank Offered Rate, or Libor, a benchmark rate that underpins the cost of trillions of dollars in credit cards and other loans. Federal prosecutors had previously agreed not to prosecute the Swiss bank over the Libor scheme. But in a rare stand against corporate recidivism, the Justice Department voided that non-prosecution agreement after UBS was accused of taking part in the effort to manipulate currency prices.
The guilty pleas, which the banks are expected to enter in federal court later on Wednesday, represent a first in a financial industry that has been dogged by numerous scandals and investigations since the 2008 financial crisis. Until now, banks have either had their biggest banking units or small subsidiaries plead guilty.
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That useless Obama Administration NOT
This is huge.
59 replies
= new reply since forum marked as read
= new reply since forum marked as read
JUMP
From the Center for Responsive Politics - donations received (Hillary Clinton) - 1999 to 2015
Bernie Sanders, from 1989-2015
Triple grr: one for the their brazen crime, one for no jail time for the crooks, one for no penalty actually paid
Drop in the bucket relative to quarterly profits.
Nobody goes to jail.
No real punishment means nothing likely to change.
I can hear champagne corks popping from my house.
And I'll bet they never do it again, right?
