Belfast Telegraph

UK Website Of The Year

Home News UK

Barclays 'facing another £65m in US fines over forex rigging'

Published 18/11/2015

The latest forex fine is an early test for incoming chief executive Jes Staley, who is due to take the helm early in December
The latest forex fine is an early test for incoming chief executive Jes Staley, who is due to take the helm early in December

Barclays is reportedly facing at least another 100 million US dollars (£65.8 million) in fines from America's banking regulator over the foreign exchange rigging scandal.

The group is expected to be hit with the penalty by the New York Department of Financial Services (DFS) within weeks, according to the Financial Times.

Its latest forex fine is understood to follow the DFS's latest investigation into alleged electronic trading abuses and adds to the 485 million US dollars (£319 million) Barclays agreed to pay the regulator in May as part of a wider £1.5 billion settlement with US and UK authorities.

It will mark an early test for incoming chief executive Jes Staley - the former JP Morgan banker who is due to take the helm early in December.

Barclays declined to comment.

The forex scandal has become one of the most expensive banking scandals in history, embroiling the industry in yet more controversy following the Libor rate-fixing affair.

And the sector is in line for further penalties as US agencies are said to be reviewing fresh forex-rigging claims against Deutsche Bank, while a number of banks are still facing US mortgage litigation costs for their actions in the run-up to the 2008 financial crisis - in particular Royal Bank of Scotland.

The FT reports that the DFS is fining Barclays for allegedly seeking to gain an unfair advantage over clients through its electronic trading platform, although it is thought the volume of trades involved was far smaller than that in the earlier investigation.

In May, investigators found that traders from different firms formed groups under various names in order to help them manipulate currency exchange rates in the £3 trillion- a-day foreign exchange market to profit the banks at the expense of clients.

Traders colluded under nicknames such as ''The Cartel'', using an invitation-only electronic chatroom and coded language to fix the price of US dollars and euros.

According to the regulators, one Barclays employee was quoted in a chat saying: ''If you ain't cheating, you ain't trying.'' A foreign exchange trader wrote: ''The less competition the better.''

Mr Staley joins as Barclays still faces a number of other investigations, including payments to Qatari investors in its 2008 right issue.

He is replacing Antony Jenkins, who was fired earlier this year after the bank's under-performance and amid reports of a clash over the future of its investment banking business.

Mr Staley's appointment comes amid a push to return Barclays' investment bank to its former glory, with the group also confirming on Tuesday that it has beefed up the division with the appointment of a new chief operating officer.

The bank promoted Mike Bagguley from his role as the unit's head of macro markets with immediate effect.

Earlier this month the bank also hired former Schroders senior executive Sir Gerry Grimstone as its deputy chairman.

Your Comments

COMMENT RULES: Comments that are judged to be defamatory, abusive or in bad taste are not acceptable and contributors who consistently fall below certain criteria will be permanently blacklisted. The moderator will not enter into debate with individual contributors and the moderator’s decision is final. It is Belfast Telegraph policy to close comments on court cases, tribunals and active legal investigations. We may also close comments on articles which are being targeted for abuse. Problems with commenting? customercare@belfasttelegraph.co.uk

Read More

From Belfast Telegraph