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Barclays, HSBC & Others Fined by EU Over Forex Trading Cartel

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Four banks — Barclays PLC (BCS - Free Report) , Credit Suisse Group AG (CS - Free Report) , HSBC Holdings plc (HSBC - Free Report) and NatWest Group plc (NWG - Free Report) — have been fined 344 million euros ($390 million) by the European Union (“EU”) antitrust regulators for manipulating the foreign exchange markets.

The EU antitrust chief, Margrethe Vestager, stated, “Today we complete our sixth cartel investigation in the financial sector since 2013 and conclude the third leg of our investigation into the foreign exchange spot trading market.”

Notably, the investigation focused on foreign exchange spot trading of the most liquid and traded currencies in the world called the G10 currencies, including the U.S. dollar, pound and euro.

Per the investigation, traders of the above-mentioned banks exchanged sensitive information and trading plans, and coordinated strategies set up via an online chat room known as Sterling Lads.

The company that has to pay the maximum amount is HSBC. HSBC has been fined 174.3 million euros, followed by Credit Suisse, which has to pay a fine of 83.3 million euros. Barclays and NatWest have been fined 54.3 million and 32.5 million euros, respectively.

While UBS Group AG (UBS - Free Report) was also involved in the misconduct, it saved itself from a fine of almost 94 million euros as it was the first bank that revealed the existence of the cartel to the European Commission.

Moreover, since Barclays, NatWest and HSBC acknowledged their participation in the cartel, their penalties were discounted by 10%.

Per the European Commission, Credit Suisse did not cooperate with the authorities and, hence, its fine was reduced by only 4%, reflecting that it was not liable for all aspects of the case.

Margrethe Vestager said, “Our cartel decisions to fine UBS, Barclays, RBS, HSBC and Credit Suisse send a clear message that the Commission remains committed to ensure a sound and competitive financial sector that is essential for investment and growth.”

A spokesperson for NatWest stated, “We are pleased to have reached this settlement regarding serious misconduct that took place in a single chatroom, and that involved a former employee of the bank, around a decade ago.”

UBS was also pleased that the matter had been resolved. Barclays, Credit Suisse and HSBC declined to comment.