U.S. and British regulators fined six major global banks nearly US$6 billion Thursday for rigging the foreign exchange market and Libor interest rates.

    The far-flung settlement included guilty pleas from Barclays Bank, JPMorgan Chase, Citicorp and the Royal Bank of Scotland for conspiring to manipulate the massive currency market, as well as a guilty plea from Switzerland’s UBS, for violating a prior settlement of Libor charges.

    These five banks agreed to a record US$2.5 billion in criminal penalties, the largest set of antitrust fines ever obtained by the U.S. Department of Justice.

    All five, plus the Bank of America, will also pay more than US$1.8 billion in fines to the U.S. Federal Reserve over “unsafe and unsound practices” in forex markets.

    The massive settlement addresses what regulators described as a brazen scheme by financial heavyweights to orchestrate trades in the US$5.3-trillion-per-day global foreign exchange market in ways that cheated clients and bolstered their own profits.

    Traders from the banks, communicating in a chat room referred to as “the Cartel,” agreed to withhold bids or offers for euros or dollars at distinct times to protect each other’s trading positions, the Department of Justice said.

    The bank’s chat room nickname “aptly describes the brazenly illegal behavior they were engaged in on a near-daily basis,” said U.S. Attorney General Loretta Lynch.

    “They acted as partners — rather than competitors — in an effort to push the exchange rate in directions favorable to their banks but detrimental to many others,” she said. “And their actions inflated the banks’ profits while harming countless consumers, investors and institutions around the globe.”

    Wednesday’s settlement follows earlier agreements between large banks and global regulators in a massive global probe into rigging foreign exchange trading that has ensnared most large banks and resulted in numerous firings and suspensions of individual traders.

    Banks have now agreed to nearly US$9 billion in fines for manipulating forex rates, Justice said.

    The size of penalties on individual banks Thursday ranged from the hundreds of millions of dollars to US$2.4 billion for British bank Barclays, depending on a bank’s involvement in the scheme and whether it had joined an earlier settlement with some regulators late last year.

    (SD-Agencies)