New York: Five major banks are expected to settle with US and British authorities next week for their role in rigging the foreign exchange market, a source told AFP Tuesday.
The person, who is familiar with the situation and spoke on condition of anonymity, said the settlement, which had been expected to be announced Wednesday, had to be pushed back to finalize certain terms, a process that involved several regulators.
The authorities have notified US banks JPMorgan Chase and Citigroup, British banks Barclays and Royal Bank of Scotland, and UBS of Switzerland that the announcement would be delayed until next week, the person said.
The currency investigation began two years ago amid suspicion that banks conspired to manipulate prices in the $5.3 trillion forex market to favor their own interests.
The broad form of the settlement deal has not changed, the source said: The five banks face fines of up to $1 billion, according to the degree of their involvement in the fraudulent activity, and four of them would plead guilty to US criminal charges.
UBS would pay a penalty under the settlement, but has received immunity from prosecution because it cooperated with US officials.
The settlement deal, aimed at averting criminal prosecution, would be signed by the US Department of Justice, the Federal Reserve, the New York State Department of Financial Services, the US Commodity Futures Trading Commission and Britain`s Financial Conduct Authority.
The sprawling forex probe has ensnared most large banks and centered on accusations traders conspired through instant messages and online chats to manipulate the market in ways that cheated clients and bolstered their own profits.
Last November, six banks caught up in the forex scandal announced a deal to pay a combined $4.25 billion in fines to settle with financial regulators in Washington and Britain. The banks were JPMorgan Chase, Citigroup, Royal Bank of Scotland, UBS and HSBC.
