JPMorgan, HSBC and Credit Agricole fined more than $500 million in Euribor rigging scandal

It’s been less than a month since JPMorgan Chase & Co.(NYSE:JPM)’s last $264 million SEC fine for corrupt hiring practices in Asia-Pacific region.

Now JPMorgan’s back in action, along with HSBC Holdings Plc (NYSE:HSBC) and Credit Agricole SA with a fine of a total of 485.5 million euros ($521 million) for rigging the Euribor benchmark as European Union antitrust regulators wrapped up a five-year investigation into the scandal.

Bloomberg reported that the trio colluded to rig the Euribor rate and exchanged sensitive information to suit their trading positions in correlated derivatives markets, in breach of EU antitrust rules, the European Commission said on Wednesday in an e-mailed statement. JPMorgan was fined 337.2 million euros, HSBC got a 33.6 million-euro penalty and Credit Agricole must pay 114.7 million euros.

Margrethe Vestager

Margrethe Vestager, the EU’s antitrust commissioner, told journalists in Brussels, adding that it’s very difficult to make an exact estimate of their profits:

The participation in such schemes was very lucrative for the banks. Tiny movements of the Euribor rate can have a huge impact given the trading volumes at stake.

The EU’s investigation into Euribor manipulation was strained three years ago after Credit Agricole, JPMorgan and HSBC refused to join a multi-bank settlement with four other lenders including Deutsche Bank AG and Societe Generale SA. Since then, the holdouts have been a thorn in the commission’s side – successfully delaying the process and showing up the regulator for its handling of the case.

The four banks that settled the Euribor case were accused of sharing, via phone and through online chats, sensitive trading information among themselves and strategizing to push benchmark rates up or down to suit their trading positions.

The EU filed formal charges against the three banks in 2014. The commission continued to investigate after EU authorities in 2013 levied a €1.71 billion fine against several other financial companies, accusing them of operating cartels involving benchmark interest rates.

Spokeswomen for all three banks said they disputed the commission’s allegations. Crédit Agricole said it would appeal the fine, while J.P. Morgan and HSBC said they would consider doing so.

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