Massive Currency Manipulation Settlement Expected Wednesday

The Justice Department is expected to announce a multi-billion dollar settlement this week (reportedly Wednesday) with five financial institutions over manipulation of the currency market. Barclays, which was not a part of the November global forex settlement, is expected to also resolve investigations by the CFTC, NY DFS and UK FCA at the same time for a sum that may be as high as $3.1 billion.

The Department of Justice has been investigating the banks for antitrust violations related to their rigging of the forex markets. Traders at the banks reportedly used electronic chat rooms to manipulate the markets and foreign exchange benchmark rates.

JPMorgan, Royal Bank of Scotland, Citigroup and UBS are expected to settle in addition to Barclays. UBS is still talking with the DOJ about possible criminal charges, but subsidiaries of the other four banks are expected to plead guilty to criminal charges. The banks are expected to pay as much as $1 billion each as part of the DOJ settlement. The media is reporting that the DOJ is pushing for a Wednesday announcement but wrapping up all of the loose ends on the agreements might take another day or two.

JPM, RBS, Citi and UBS were all part of the November settlement which resolved investigations by the CFTC, OCC and UK FCA, but not the DOJ. That deal provided them with a discount for early settlement of the charges. According to the media, Barclays backed out of the deal in November because it could not reach agreement with the New York Department of Financial Services as well. This agreement will reportedly carve out the NYDFS investigation into its use of electronic trading programs to manipulate the forex market to allow that aspect to go forward.

Citigroup also announced today that the DOJ had declined to prosecute it for LIBOR rigging. Including the Deutsche Bank fines last month, a dozen financial institutions have paid a total of about $9 billion to resolve investigations into Libor manipulation.

The deadline for submitting a whistleblower claim on most of the first set of Notices of Covered Actions has passed, with only Citibank still open for a few more days. If there was a forex whistleblower behind any of these actions, the award would likely set a record for the Dodd-Frank whistleblower programs. The highest reward handed out so far was by the SEC – $30 million to an international whistleblower last year.

For questions about this and other aspects of the CFTC whistleblower program, as well as assistance reporting violations of the Commodity Exchange Act to the U.S Government, contact one of our whistleblower attorneys via our contact form or by calling 1-800-590-4116.

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