‘Sterling Lads’ Forex Fix Earns Banks $390 Million in Fines

(Bloomberg) --

HSBC Holdings Plc, Credit Suisse Group AG,  Barclays Plc, and Royal Bank of Scotland Group Plc were fined 344 million euros ($390 million) by the European Commission for their involvement in a foreign-exchange price fixing cartel. 

“The collusive behavior of the five banks undermined the integrity of the financial sector at the expense of the European economy and consumers,” Competition Commissioner Margrethe Vestager said in a statement.

Traders ran the cartels from online chatrooms, swapping sensitive information and trading plans that allowed them to make informed decisions to buy or sell currencies, the regulator said. In this case, the traders occasionally used a chatroom dubbed “Sterling Lads” to plot their buying and selling. 

While still in the hundreds of millions, these cartel fines are lower than a 1.3 billion-euro penalty for banks for rigging Euribor rates and below a record 3.8 billion-euro penalty for collusion between truckmakers.

UBS Group AG escaped a 94 million euro fine under the Commission's leniency provisions for having revealed the existence of the cartel.

“We are pleased to have reached this settlement regarding serious misconduct that took place in a single chatroom, and that involved a former employee of the bank, around a decade ago,” spokesman for NatWest, RBS' new name, said. “Our culture and controls have changed fundamentally during the past ten years and this kind of behaviour has no place at the bank we are today.”

Swiss lender Credit Suisse didn't get a cut in its penalty. The bank said in March that it “continues to believe that it did not engage in any systemic conduct in the FX markets which violated the European Union's competition rules.” It declined to comment on Thursday.

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