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Posted in:Corporate and Commercial, Litigation|May 15, 2015 | Join the mailing list

You may have noted from the media and our previous article (“Barclays & CitiGroup Fines for FOREX”) that UK and US banks are currently awaiting to find out what fines they will receive from US and UK regulators.  The fines are expected to be prohibitive and
measured in their billions.

The spot-light is on the US Department of Justice fines because it has been revealed that the Department is considering further measures and not just fines.  A fine is imposed by the Department by way of the Bank admitting that it contravened the law in return
for which the Department levies a fine and waives a prosecution through the use of a Non-Prosecution Agreement.  This time, however, the US Department of Justice considers that given its previous waivers (including in relation to fraudulent activities), especially
with regards to RBS and Barclays, they may now wish to pursue the prosecution.  In addition to pursuing the prosecution for FOREX manipulation the Department is also considering rescinding the previous waivers (especially in regards to LIBOR manipulation)
and also prosecuting those offences.  This is most likely the reason behind Barclays not settling its FOREX manipulation case in 2014 when five other banks settled with the UK’s FCA and the US’s CFTC.

It is understood that Barclays are facing an FCA fine of at least £2 billion.  As the US has historically imposed fines that are significantly greater than the UK’s FCA the expected bill for Barclays will be a multiple of two billion.

As such, the news that at least seven banks will be fined runs alongside  the news that they may (all or separately) face a criminal prosecution by the US Government.  The fines are unlikely to cause Barclays any solvency issues, but the prosecution will be
a significant action that could delay the reinvigoration of Barclays under Antony Jenkins, who took over following the LIBOR fines imposed on the bank in 2012.

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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