Photographer: Jason Alden/Bloomberg

BNP Paribas Fined $246 Million Over Currency Manipulation

  • Fed faults French bank’s oversight of foreign-exchange traders
  • BNP failed to halt improper chat room communications, Fed says

BNP Paribas SA agreed to pay $246 million to settle Federal Reserve allegations that the bank failed to keep its currency traders from using electronic chatrooms to manipulate prices.

The Fed ordered the Paris-based lender to improve its oversight and internal controls for foreign-exchange trading. BNP Paribas also agreed to $350 million settlement in May with the New York Department of Financial Services over the deficiencies.

Global banks have faced billions in fines, regulatory sanctions and legal challenges over the use of chatrooms to influence currency rates, and some of the individuals involved were the targets of criminal prosecutions. Earlier this year, a former BNP Paribas trader, Jason Katz, pleaded guilty to violating federal antitrust laws. The Fed barred him from the U.S. banking industry in January.

“BNP Paribas deeply regrets the past misconduct, which was a clear breach of the high standards on which the group operates,” the bank said in a statement Monday. The lender has since put in place “extensive measures to strengthen its systems of control and compliance” and introduced a new code of conduct for employees.

It said the fine would be covered by existing provisions.

The Fed’s order, focused on the six years through 2013, said the bank’s “deficient policies and procedures prevented it from detecting and addressing unsafe and unsound conduct by certain FX traders, including in communications by traders in multibank chatrooms.”

BNP Paribas is the latest in a line of banks fined in currency probes. In May 2015, Citigroup Inc., Barclays Plc, JPMorgan Chase & Co. and Royal Bank of Scotland Group Plc pleaded guilty to rigging currency rates in a $5.8 billion settlement with multiple regulators.

    Before it's here, it's on the Bloomberg Terminal.