BNP Paribas to Pay $350 Million to Settle New York Forex Allegations -- Update
May 24 2017 - 1:49PM
Dow Jones News
By Nicole Hong
BNP Paribas SA agreed on Wednesday to pay a $350 million penalty
to resolve allegations by New York's banking regulator that
foreign-exchange traders at the French bank engaged in collusion to
manipulate currency rates.
The New York Department of Financial Services said deficient
oversight at BNP Paribas "allowed nearly unfettered misconduct"
among traders and salespeople in the bank's foreign-exchange
business, in violation of New York banking laws.
The investigation focused on misconduct that began a decade ago,
involving at least a dozen BNP Paribas employees around the
world.
The Department of Financial Services found that from 2007 until
2013, currency traders at BNP Paribas in New York and other big
trading hubs participated in chat rooms where they colluded to
widen spreads, manipulate the price at which daily benchmark rates
were set and hide markups from customers -- with the ultimate goal
of artificially increasing profits.
In particular, according to regulators, one trader at the bank's
New York branch labeled the chat group "cartel" and worked with
colleagues at other large banks to conduct fake trades during light
trading hours that caused currency prices to spike upward or
downward. The trader manipulated prices and spreads in several
currencies, including the South African rand and Turkish lira.
The investigation also found that BNP Paribas traders improperly
exchanged confidential customer information with employees at other
banks, which led to traders adjusting prices to unfairly profit at
these customers' expense.
Under the terms of the consent order, the bank admitted to the
regulator's allegations.
"BNP Paribas deeply regrets the past misconduct which led to
this settlement," the bank's spokespeople said in a statement,
adding that the bank has since implemented new measures to
strengthen its compliance.
The bank has already fired several employees as part of the
fallout.
Wednesday's settlement is part of a long-running probe by
regulators around the world into possible manipulation of
foreign-exchange rates. The investigation has led to the suspension
or firing of traders at around a dozen banks in the largest
currency dealing hubs.
In 2015, five banks pleaded guilty to fixing currency prices,
and the Justice Department has charged at least six individuals as
part of the probe.
Write to Nicole Hong at nicole.hong@wsj.com
(END) Dow Jones Newswires
May 24, 2017 14:34 ET (18:34 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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