A second New York-based FX trader has pleaded guilty to colluding to manipulate markets.
Chris Cummins, a former emerging markets trader for Citi in New York, pleaded guilty to misconduct between approximately January 2007 and July 2013, according to the US Department of Justice. Earlier this month, Jason Katz, a former EM trader at a number of banks accepted guilt over the same charges.
Last week the DoJ also indicted three members of the Cartel chatroom on similar charges and is expected to commence extradition proceedings soon as it ramps up its efforts to bring individuals to justice over the FX manipulation scandal.
Citi has become the first bank to settle with South Africa’s Competition Commission, paying the equivalent of a just over $5 million fine related to charges it participated in a cartel that manipulated prices in the rand.
The Commission found that from at least 2007, Citi and its competitors had a general agreement to collude on prices for bids, offers and bid-offer spreads for the spot trades in relation to currency trading involving USD/ZAR. The Commission last week charged 14 banks with collusion.
One of two banks still to settle a class action lawsuit over FX manipulation claims has agreed to pay $190 million.
Court documents filed today (September 29) show that Deutsche Bank has agreed to settle, leaving Credit Suisse as the only bank of 16 that were named in the class action yet to agree a deal. The proposed settlement remains subject to a Fairness Hearing – Deutsche has also agreed to provide “reasonable cooperation” in the continued prosecution of the Action, according to court documents.
The Federal Reserve Board has fined HSBC just over $175 million for the firm's “unsafe and unsound practices” in its FX trading business.
The Fed says it levied the fine for deficiencies in HSBC's oversight of, and internal controls over, FX. It adds that the firm failed to detect and address its traders misusing confidential customer information, as well as using electronic chatrooms to communicate with competitors about their trading positions.
The Board's order requires HSBC to improve its controls and compliance risk management concerning the firm's FX trading.
The Federal Reserve Board has announced that it is seeking to permanently bar Peter Little the former head of the G10 FX spot desk at Barclays in New York, from employment in the banking industry. The central bank is also seeking to impose a $487,500 fine on Little, who joined HSBC in New York in mid-2013 as head of G10 spot FX trading.
Little, who is believed to be preparing to challenge the Fed’s finding, is alleged to have engaged in unsafe and unsound practices.
Brazil’s Tribunal of the Administrative Council for Economic Defense (CADE) has approved three Cease and Desist Agreements to settle a cartel probe in the foreign exchange market, involving the Brazilian real and offshore currencies.
The agreements were signed between CADE and the Royal Bank of Canada and Morgan Stanley Bank, as well as Pablo Frisanco de Oliveira, a former Deutsche Bank trader in local markets. A total of BRL 42.9 million ($13 million) will be collected for the Fund for the Defense of Diffuse Rights, as a pecuniary contribution, CADE says.
More than a few people have told me in recent weeks that they see the trial (which is now at the appeal stage) of Mark Johnson, and that of the Cartel threesome – which started this week in New York – as being inextricably linked. You all know what’s coming…I don't agree. In fact I would argue there are some fundamental differences that mean this week’s trial – complex as it is – cannot be seen through the same lens.
This week’s podcast sees Colin Lambert and Galen Stops discuss the latest lawsuit facing banks over their actions in FX markets, during which Lambert invokes the spirit of a film that he can’t remember the name of, by asking, “Could you ask me that question again Galen?”
Stops also has a series of questions relating to the Virtu-ITG tie up reported this week as our two podcasters discuss the evolution of the non-bank trading firm business model. Where do these firms expand? Lambert is fairly confident (is he ever not?) that it is not by buying other trading firms, but both men see opportunities away from trading.
They also discuss volatility in crypto markets and ask – at what stage does the institutional enthusiasm for crypto start to weaken?
This week’s podcast also highlights how Lambert giveth…and taketh away…as it is bookended by praise and ridicule for his colleague! Find out why by listening in to this week’s edition.
Just two weeks after the three members of the notorious Bloomberg chatroom The Cartel were acquitted in a New York court of manipulation of FX markets, a group of banks are facing yet another lawsuit from a class action of investors over their FX market activities.
The action has been brought by a group of major investors who explicitly opted out of the class action settlement last year that saw 14 of the 16 banks accused pay over $2.3 billion in damages (a 15th settled later).