Barclays & CitiGroup Fines for FOREX

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Posted in:Banking and Finance|May 14, 2015 | Join the mailing list

There has been a lot of media attention regarding the anticipated fine of Barclays and CitiGroup over the Foreign Exchange (“Forex”) scandal.  Barclays’ fine by the Financial Conduct Authority (“FCA”) is expected to be £2 billion.  To put this in to context,
all fines combined by the FCA in 2014 (including when five other banks were also fined for Forex manipulation) was £1.4 billion.  CitiGroup is also anticipated to be fined.

The fines will be in three parts.  In the United States there have been fines for five other banks by the commodities and future trading commission “CFTC”) in addition to the FCA fines.  Barclays and CitiGroup have not been fined by these two regulators.  The
third fine that all of the banks are currently facing is from the US Department for Justice.

There has been historic criticism of fines by the FCA because the CFTC and US Dept. of Justice fines have been significantly higher than the UK’s FCA fines.  For example, Barclays was fined for manipulating LIBOR in 2012.  The FCA fine was £59.5 million by
the FSA (the FCA’s predecessor), US$200 million by the CFTC and US$160 million to the US Dept. of Justice.

There has historically been criticism that the fines levied by the UK are minor when compared to the US.  Fines have increased.  Below is a graph showing the total fines by the UK regulators since 2009.  The totality of fines in 2014 was £1.4 billion.  Barclays
is expected to be fined £2 billion by the FCA imminently.

 

If there are any issues in this update or more generally that you would like to discuss, please contact one of our Banking and Financial Regulatory team on 0161 833 9211.

(The information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Berg or any of its partners or employees. Professional legal advice
should be obtained before taking, or refraining from taking, any action as a result of this article.)

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