The DOJ is pushing for a mid-may settlement by five banks as part of its antitrust and fraud investigation into forex manipulation. Last month, the media reported that the DOJ was seeking an average of $1 billion from each bank. The banks that may be a part of the settlement are JPMorgan, Citigroup, UBS Group, Royal Bank of Scotland and Barclays.
In November, six banks paid more than $4 billion to resolve investigations by the CFTC, OCC and the UK FCA. Four of the banks believed to be a part of the upcoming settlement, JPM, Citi, UBS and RBS, participated in the previous settlement. The settlement agreement did not cover the Department of Justice investigation.
Barclays was initially going to be a part of the November settlement but pulled out when they could not reach agreement with the New York Department of Financial Services. The NY DFS has reportedly pushed for stronger penalties against the banks. NYDFS regulates banks operating in New York State.
There are still a number of unresolved details that could delay the announcement of the settlement or cause one of the banks to pull out. Barclays has indicated it wants to settle with all regulators at once, so it may not participate if NYDFS does not agree to a settlement. One of the things that could hold up that settlement is the DFS investigation into automated trading by the bank. The NYDFS investigation into whether the bank’s trading platform built in algorithms to manipulate the market may still be in the early stages. According to media reports, another area that might delay the settlement is the necessity of getting waivers from the SEC and Department of Labor to allow the banks to continue operating following the enforcement actions.