The Justice Department on Wednesday announced five major banks have agreed to plead guilty to charges involving the foreign exchange market.
The banks -- Citicorp, JPMorgan Chase & Co., Barclays PLC, The Royal Bank of Scotland plc and UBS AG – will pay criminal fines totaling more than $2.5 billion as part of the felony plea agreement, according to the Justice Department.
Attorney General Loretta Lynch announced the plea agreement, in a 10 a.m. news conference that the Justice Department live-streamed.
According to plea agreements to be filed in federal court in Connecticut, between December 2007 and January 2013, euro-dollar traders at Citicorp, JPMorgan, Barclays and RBS – self-described members of “The Cartel” – used an electronic chat room and coded language to manipulate the benchmark exchange rate.
The Justice Department said that “members of ‘The Cartel’ manipulated the euro-dollar exchange rate by agreeing to withhold bids or offers for euros or dollars to avoid moving the exchange rate in a direction adverse to open positions held by co-conspirators.”
“By agreeing not to buy or sell at certain times, the traders protected each other’s trading positions,” the department stated.
The four banks agreed to plead guilty to one felony count of conspiring to fix prices and rig bids.
The fifth bank, UBS AG, agreed to plead guilty to manipulating the London Interbank Offered Rate (LIBOR) and other benchmark interest rates, according to the department.
As part of the same investigation, the Federal Reserve also announced that it was imposing on the five banks fines of over $1.6 billion, and Barclays settled related claims with the New York State Department of Financial Services, the Commodity Futures Trading Commission and the United Kingdom’s Financial Conduct Authority.