The banking “cartel” is busted.
JPMorgan Chase, Citigroup, Barclays and Royal Bank of Scotland on Wednesday agreed to plead guilty to manipulating global currency markets and will pay more than $5 billion in fines.
The Department of Justice also ripped up a deferred prosecution agreement with UBS for violating the terms of an earlier settlement tied to rate-rigging.
Traders from the five banks, who dubbed themselves “the cartel,” were part of a chat room group that colluded to manipulate exchange rates and rip off clients.
The extent of the fraud was widespread and affected rates around the world, federal prosecutors said Wednesday.
“This Department of Justice will vigorously prosecute all of those who tilt the economic system in their favor,” US Attorney General Loretta Lynch said during a news conference.
Barclays paid the biggest penalty of $2.4 billion to UK and US regulators, including the DOJ, the Federal Reserve and New York’s Department of Financial Services. The Britain-based bank, which also fired eight employees, was at the center of much of the rigging, regulators said.
“If you aint cheating, you aint trying,” one Barclays trader said, according to transcripts of the chat room messages.
The Barclays employees used tough-guy language and even had an initiation process, prosecutors allege.
Overall, six banks will pay nearly $6 billion in penalties. Citi ($1.27 billion), JPMorgan ($892 million) RBS ($669 million) and UBS ($545 million) paid fines and pleaded guilty to charges. Bank of America will pay $205 million without admitting guilt.