Further reports of settlements relating to FX market manipulation are being announced during the course of today, the latest being Barclays PLC (LON:BARC) which, as part of their industry-wide investigations into certain sales and trading practices in the FX market, has today reached settlements with the U.S. Commodity Futures Trading Commission (“CFTC”), the New York State Department of Financial Services (“DFS”), the U.S. Department of Justice (“DOJ”), the Board of Governors of the Federal Reserve System (“FRB”) and the UK Financial Conduct Authority (“FCA” and together the “authorities”).
Barclays has agreed to pay a combined total of £1,534 million. In common with other financial institutions announcing FX settlements today with the DOJ, Barclays has also agreed to plead guilty to a violation of US anti-trust law.
The individual amounts due to each of the above mentioned authorities by Barclays is as follows:
·CFTC $400 million
· DFS $485 million
· DOJ $710 million (including $60 million referable to the Non-Prosecution Agreement)
· FRB $342 million
· FCA £284 million (reduced by 20% early settlement discount from £355 million)
This equates to a Sterling equivalent of £1.53 billion, the highest fiscal penalty paid so far by any single institution with regard to the FX manipulation cases that have been ongoing since mid 2013.
The fine imposed by the DOJ includes an amount of £38.7 million (US$60 million) as a consequence of certain practices continuing after Barclays entered into a Non-Prosecution Agreement (“NPA”) with the DOJ in June 2012.
However, the DOJ has exercised its discretion not to declare a breach of the NPA recognising the significant cultural and compliance changes already instituted by Barclays and the degree of co-operation that Barclays provided in the course of the DOJ’s investigation. As the settlements show, Barclays has also received recognition for these changes and its co-operation from other authorities.
Barclays has also reached a settlement with the CFTC as part of an industry-wide investigation into the setting of the US Dollar ISDAfix benchmark. In connection with this resolution, Barclays has agreed to pay £74.2 million (US$115 million).
The fines imposed under today’s settlements are covered by existing provisions of £2.05 billion, including those taken by Barclays in its Q1 2015 results.
Antony Jenkins, Barclays CEO, said: “The misconduct at the core of these investigations is wholly incompatible with Barclays’ purpose and values and we deeply regret that it occurred. This demonstrates again the importance of our continuing work to build a values-based culture and strengthen our control environment. We remain completely committed to that effort.”
“I share the frustration of shareholders and colleagues that some individuals have once more brought our company and industry into disrepute. Dealing with these issues, including taking the appropriate disciplinary action against the individuals involved, is a necessary and important part of our plan to transform Barclays and remains a key priority” concluded Mr. Jenkins.
Barclays continues to co-operate with ongoing investigations into FX (including in relation to electronic trading), LIBOR and other benchmark investigations and Precious Metals and to manage related litigation risks as described at page 307 of the 2014 Annual Report.
For the official announcement from the London Stock Exchange, click here.