U.S. Said to Give Banks December Deadline in FX ProbeDavid McLaughlin
The U.S. Justice Department has given banks about a month to come clean about wrongdoing as it moves closer to wrapping up an investigation into the rigging of currency benchmarks, a person familiar with the probe said.
The banks have met with officials in recent weeks to lay out how they see their liability, said the person, who asked not to be identified because the discussions are confidential. Prosecutors have demanded a full accounting of any misconduct by mid-December, the person said.
U.S. Attorney General Eric Holder said yesterday the department will finish the currency-trading investigation “relatively soon” and is moving toward civil and criminal resolutions.
The Justice Department is likely to bring cases against banks early next year, followed by charges against individuals, the person said. Prosecutors had been pushing to bring a case against at least one bank before the end of the year.
Investigations by authorities on three continents are proceeding after six banks, including Citigroup Inc., JPMorgan Chase & Co. and UBS AG, agreed to pay $4.3 billion to regulators in Europe and the U.S. Nov. 12 to settle claims that traders colluded with counterparts at other firms in an attempt to manipulate currency rates.
Barclays Plc pulled out of the group settlement earlier this week after Benjamin Lawsky, the head of New York’s Department of Financial Services, refused to join in the Nov. 12 accords, according to a person familiar with the matter. The banks that reached deals don’t rely on a New York license, leaving Barclays in a unique position to have its settlement delayed by Lawsky’s view that it wasn’t severe enough.
The December deadline and the talks with the banks were reported earlier by the Wall Street Journal.
Regulators released transcripts of chat groups dubbed “the 3 musketeers,” “the A-team” and “1 team, 1 dream,” showing traders sharing client orders and attempting to rig the WM/Reuters currency benchmarks. Traders boasted about “whacking” and “double teaming” the market and congratulating one another when plans paid off.
U.S. prosecutors have been investigating manipulation of currency benchmarks for more than a year. They’re working with the Federal Reserve, as well as Britain’s Serious Fraud Office, which opened an investigation in July. U.K. Chancellor of the Exchequer George Osborne wrote to the prosecutors today saying the agency, which has struggled with funding issues in the past and sought more funds to pursue blockbuster cases, will get the money to “pursue this case as vigorously as possible.”
The Swiss Attorney General is also conducting a criminal investigation against individuals, a spokeswoman for the office said on Nov. 12.
The Justice Department may seek guilty pleas from several firms, including at least one in the U.S., a person familiar with the matter has said. While federal prosecutors have wrested convictions from foreign banks this year, they’ve yet to win a guilty plea from a U.S. lender.
In addition to the criminal and civil probes, antitrust investigators at the European Union, Department of Justice and Swiss Competition Commission are also still looking into the collusion allegations.