Five of the world’s biggest banks face fines totalling $5.7bn (£3.6bn) for manipulating foreign exchange markets for four years between 2008 and 2012.
Barclays, Citigroup, JPMorgan, and RBS have agreed to plead guilty to criminal charges in the US, while the fifth bank, UBS, will plead guilty to rigging benchmark interest rates.
Barclays faces the greatest fine, $2.4bn, as it refused to settle investigations by the UK, US, and Swiss regulators last year.
Between 2008 and 2012, traders from the five banks formed a cartel, where they used private chat rooms to manipulate the prices of global currencies using a variety of strategies.
In one scheme, every day a trader would amass a large position in one currency, and would sell their position at the 4pm “fix”, with other members of the cartel able to profit form their advanced knowledge on the sale.
In a statement, the New York Department of Financial Services describe the fraud:
“In a fair and functioning economic market, a business takes on risk in the hopes of earning a profit. However, Barclays’ traders coordinated with other banks to help remove that risk and instead just take profits at the expense of their clients. In other words, it was a “heads I win, tails you lose” trading system for Barclays.”
Separately to the five banks being fined $5.7bn, the federal Reserve also fined Bank of America Morgan chase $205 million for its own cheating of the foreign exchange system.