Tag Archives: BNP Paribas

Banks Ordered to Defend Suit Claiming Benchmark Rate Was Rigged

  • Suit by Alaska pension fund can proceed to trial, judge rules
  • Bank of America, Barclays accused of rigging ISDAfix rate

Bank of America Corp., Barclays Plc and a dozen more banks must face investor claims that they rigged a benchmark used in the sales of interest-rate derivatives and other financial instruments.

U.S. District Judge Jesse Furman in Manhattan Monday rebuffed the banks’ request to throw out antitrust lawsuits accusing the institutions of colluding to set ISDAfix, affecting trillions of dollars of financial instruments. The rate is used to set prices on interest-rate swap transactions, commercial real-estate mortgages and other securities.

An Alaska pension fund and other investors raised “plausible allegations that a conspiracy among the defendants existed,” Furman said in a 36-page ruling. He allowed antitrust and breach-of-contract contract claims to proceed to trial, while throwing out other allegations.

Starting in 2009, the banks used electronic chat rooms and other means of private communication to set ISDAfix, typically submitting identical rate quotes, investors said in their suit. They are seeking billions in losses tied to the alleged rate-fixing scheme.

John Yiannacopoulos, a Bank of America spokesman, had no immediate comment on Furman’s ruling. Kerrie Cohen, a Barclays spokeswoman, declined to comment.

Many Banks

Investors also named as defendants Deutsche Bank AG, BNP Paribas SA, HSBC Holdings Plc, Royal Bank of Scotland Group Plc, Credit Suisse Group AG, UBS AG, Goldman Sachs Group Inc., Nomura Holdings Inc., Wells Fargo & Co. and JPMorgan Chase & Co.

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Big banks accused of interest rate-swap fixing in U.S. class action suit

NEW YORK (IFR/Reuters) – A class action lawsuit, filed Wednesday, accuses 10 of Wall Street’s biggest banks and two trading platforms of conspiring to limit competition in the $320 trillion market for interest rate swaps.

The class action lawsuit, filed in U.S. District Court in Manhattan, accuses Goldman Sachs Group, Bank of America Merrill Lynch, JPMorgan Chase, Citigroup, Credit Suisse Group, Barclays Plc, BNP Paribas SA, UBS, Deutsche Bank AG, and the Royal Bank of Scotland of colluding to prevent the trading of interest rate swaps on electronic exchanges, like the ones on which stocks are traded.

As a result, the lawsuit alleges, banks have successfully prevented new competition from non-banks in the lucrative market for dealing interest rate swaps, the world’s most commonly traded derivative.

The banks “have been able to extract billions of dollars in monopoly rents, year after year, from the class members in this case,” the lawsuit alleged.

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Revolving door: BNP Paribas hires ex-U.S.Treasury official for compliance job

BNP Paribas has hired a former top official at the U.S. Treasury Department’s sanctions office, people familiar with the matter said, part of the French bank’s effort to build up its compliance department after its record settlement over sanctions violations.

Sean Thornton, a former chief counsel at Treasury’s Office of Foreign Assets Control, will become legal counsel for Paribas’ U.S. sanctions compliance group, one of the people said. He will head the Group Financial Security U.S. legal team.

BNP Paribas in June agreed to pay U.S. authorities $8.9 billion (5.4 billion pounds) and to plead guilty to criminal charges for conspiring to violate sanctions on Sudan and other countries, in part by stripping information from wire transfers so they could pass through the U.S. system without raising red flags.
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BNP PARIBAS : Germany, France seek unified EU position on U.S. bank fines

France and Germany are seeking a unified European position on U.S. banking sanctions, a German spokesman said on Monday, though Paris denied a report it was pushing for a G20 meeting of world leaders later this year to challenge the sanctions.

The French Finance Ministry said it was instead seeking support from EU partners to bolster the use of the euro in international business as a way of reducing the potentially very costly exposure of European firms to U.S. sanctions law.

The so-called extra-territoriality of U.S. sanctions law, which apply to foreign firms carrying out transactions in U.S. dollars even if the operations involve non-U.S. branches, allowed U.S. authorities to fine French lender BNP Paribas nearly $9 billion (6.70 billion pounds) last month.

A spokesman for the German finance ministry said: “I can confirm that the matter was a subject of discussion between Germany and France and also between the ministers.”

Both German Finance Minister Wolfgang Schaeuble and his French counterpart Michel Sapin “would like to see a unified European position on this matter,” he added. Individual banks were not discussed, he said.

The German Finance Ministry made the comments following a Financial Times report which said Paris had gathered support to challenge heavy U.S. penalties on foreign banks at a gathering of the world’s 20 biggest economies in November in Australia.

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BNP PARIBAS : Exclusive: Cuomo intervened in BNP deal to get $1 billion more for NY state fund

Reuters) – Only days before U.S. authorities reached a landmark $8.97 billion settlement with BNP Paribas over the bank’s dealings with countries subject to U.S. sanctions, New York Governor Andrew Cuomo intervened to ensure the state government got a much bigger share of the proceeds, according to three people familiar with the situation.

One of these people said Cuomo called Cyrus Vance, the Manhattan District Attorney, on June 27 to seek a big chunk of the $2.2 billion that was going to be available to Vance to tap for law enforcement projects.

Vance eventually agreed that $1.05 billion of the $2.2 billion would go into the state’s coffers because otherwise the whole deal could be jeopardized, this person said. The settlement was announced on Monday, June 30, after last-minute negotiations over the preceding weekend.

The state’s general fund was already set to receive $2.24 billion from a state regulator’s piece of the settlement, and the eleventh-hour deal pushed the state’s take up to $3.29 billion. That change was contained in a side agreement signed by Vance on June 29, and a lawyer for Cuomo on June 30.

The years-long negotiations with BNP – and the tussle over the proceeds – were complex. The deal required agreement among at least five powerful law-enforcement and regulatory authorities: the U.S. Department of Justice in Washington and its U.S. Attorney’s office in Manhattan, the Federal Reserve, the U.S. Department of the Treasury, the New York State Department of Financial Services (NYSDFS), and the Manhattan District Attorney’s Office.

Officials involved in the talks were told that New York State financial regulator Benjamin Lawsky would not sign off on his portion of the settlement unless a side agreement involving the extra money for the state was reached, according to the three sources. Lawsky is Cuomo’s former chief of staff and was nominated to be head of the NYSDFS by Cuomo in 2011.

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BNP Paribas : to pay $80 million for defrauding U.S. Agriculture Department

The U.S. Justice Department announced on Thursday that a Federal court entered judgment against French bank BNP Paribas for $80 million for defrauding a program designed to encourage American exports.

The program, run by the U.S. Department of Agriculture, covered losses for American commodities exporters in cases where their import partner failed to make a payment.

Last month, BNP Paribas pleaded guilty and agreed to pay $8.9 billion in a settlement with U.S. authorities for violating U.S. economic sanctions.

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JPMorgan Said to Have Unwittingly Helped BNP’s Transfers

lol Well, Jamie better get some rest for 4th of July because here is another headache for him. You notice that no bank execs gone to jail for U.S. sanctions.

JPMorgan Chase & Co. (JPM)unwittingly helped BNP Paribas SA (BNP) violate U.S. sanctions as the French bank hid billions of dollars in transactions involving Sudan and Cuba, according to court documents and people with knowledge of the matter.

BNP Paribas turned to JPMorgan on the basis of legal advice from Cleary Gottlieb Steen & Hamilton LLP, said two people who asked not be named because the identities of the bank and the law firm haven’t been disclosed. The Paris-based bank relied on a legal memo that suggested using a U.S. bank might protect it from sanctions penalties, according to the statement of facts filed by prosecutors in New York.

JPMorgan is referred to as “U.S. Bank 1” while Cleary Gottlieb is identified as “U.S. Law Firm 1” in the court filings, the people said. Cleary Gottlieb later said such transactions may be illegal. Neither JPMorgan nor Cleary Gottlieb are accused of wrongdoing.

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