The Royal Bank of Scotland has suspended another two traders as part of an investigation by the bank into failings in its foreign exchange business.
“We can confirm that two members of staff have been suspended as part of the ongoing FX investigation at the bank,” RBS said on Wednesday. It declined to comment on the identity of the traders and it is understood the suspensions are pending further investigations.
RBS was one of six banks fined a combined $4.3 billion by regulators in the UK, the US and Switzerland in November for having “ineffective controls” that allowed individual spot traders to put their banks’ interests ahead of those of their clients.
The bank agreed to pay penalties of £217 million to the UK’s Financial Conduct Authority and $290 million to the US Commodity Futures Trading Commission as part of the FX settlement. Authorities said individual traders from several banks had shared confidential client order information and colluded to move markets away from clients to boost their profits.
RBS, which is 79% owned by the British government, last year launched an internal review into its FX activities and suspended three employees who were among six placed in a disciplinary process.
The bank is reviewing the conduct of more than 50 current and former traders who were involved in the part of the business that was the focus of the regulators’ investigations.
RBS is releasing its annual results today (26 February) which will likely provide adjusted estimates for its litigation and conduct costs. Analysts at investment banking firm Keefe Bruyette & Woods believe the bank may have to set aside an extra £2.6 billion to settle FX and other regulatory investigations into benchmark rigging
The statement from RBS came as The Times newspaper reported on Wednesday that the FCA is escalating its supervision of FX traders after the discovery of further misconduct by the US Department of Justice.
It said the latest cases relate to the rigging of emerging market currencies, which did not form part of the FCA’s internal investigation.
The DoJ, Federal Reserve and New York's financial regulator are still investigating banks over FX trading.
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