Reports: At Least Six Major Banks Set To Settle Foreign-exchange Rigging Probe

(RTTNews) - At least six major banks are set to reach a multi-billon dollar settlement with financial regulators in the U.S., the U.K., and Switzerland to resolve charges of foreign exchange rate rigging, according to media reports on Tuesday. Penalties reaching about $4 billion are expected to be announced against the banks as early as Wednesday.

The affected banks include Swiss banking giant UBS AG (UBS), British lenders HSBC Holdings Plc (HBC, HSBA.L), Barclays Plc (BCS, BARC.L) and Royal Bank of Scotland Group Plc (RBS, RBS.L) as well as US financial giants JPMorgan Chase & Co. (JPM) and Citigroup, Inc. (C). It could also potentially include Bank of America Corp. (BAC).

Most of the banks have already made provisions for legal matters in the financial results for the third quarter for settling the foreign exchange manipulation probes.

The investigations by the regulators were focused on the spot FX trading activities as well as controls applicable to those activities. The traders are charged of colluding and sharing information about client orders to manipulate prices.

The settlement is being reached after investigations were conducted by various regulatory and civil enforcement authorities in a dozen countries on three continents over the past 18 months.

The regulators included US banking regulators, the Commodity Futures Trading Commission or CFTC, and Office of the Comptroller of the Currency or OCC, as well as the U.K. Financial Conduct Authority or the FCA, Swiss Financial Market Supervisory Authority or Finma, and other foreign government authorities.

Though individual bank executives and employees were not targeted in the current investigations, they are said to be next in line for scrutiny related to trading for their own personal accounts in the foreign-exchange markets. Finma is said to have already sent out warning letters to at least ten past and present UBS employees.