Banksters Busted, Fined Billions For Rigging Currency Market

Clockwise from top left: Barclays, Citicorp, JPMorgan Chase and the Royal Bank of Scotland will pay billions in fines and plead guilty to criminally manipulating global currency market going back to 2007. The bank UBS AG (not pictured) has also agreed to plead guilty. Lefteris Pitarakis/Nick Ut/Kathy Willens/Matt Dunham/AP

There is no shortage of “conspiracy theorists” that blame the “centralized banking system” for all of the evils of the world. Often citing a clandestine cabal of bankers for manipulating world events and even wars for profit. Then along comes “The Cartel,” who according to new U.S. Attorney General Loretta Lynch, “starting as early as Dec 2007, currency traders at several multinational banks formed a group dubbed ‘The Cartel.’ It is perhaps fitting that those traders chose that name, as it aptly describes the brazenly illegal behavior they were engaging in on a near-daily basis.”

AG Lynch describes the case as a “brazen display of collusion” in which currency traders at Citicorp, JPMorgan, Barclays and RBS used a chat room to manipulate exchange rates to benefit themselves. The financial giants Citicorp, JPMorgan Chase, Barclays, The Royal Bank of Scotland and UBS AG have agreed to plead guilty to criminal charges and pay more than $5.5 billion in collective penalties. The traders actions “inflated the banks’ profits while harming countless consumers, investors and institutions around the globe — from pension funds to major corporations, and including the banks’ own customers,” Lynch said.

The criminal settlements are the result of a global crackdown on systematic manipulation of financial benchmarks by bank traders. However, no individual bank employees were hit with criminal charges as part of the settlements. Several authorities have said that investigations into foreign-exchange issues are continuing though. Jimmy Gurulé a former assistant attorney general and Treasury official, now a University of Notre Dame law professor, questions whether the criminal pleas and massive fines would produce meaningful change in banks’ activities.

“Once again the actual perpetrators and criminal architects of the fraud scheme will avoid criminal liability,” said Gurulé. “While the payment of these large fines may help to reduce the federal deficit, such penalties will do little to change the pervasive culture of corruption that currently exists in the banking sector. Real change will only occur when corrupt bank officials are indicted, convicted and sent to prison for their crimes.”

Bank officials took responsibility for the illegal activity and terminated dozens of traders. Responses from each of the financial institutions expressed “disappointment,” “embarrassment” and “appropriate disciplinary actions” for the “unacceptable behavior” of a “small group of employees.”

Investor reaction to the settlements appears to be mixed with shares of Barclays, UBS and Royal Bank of Scotland going up at least 1.9% on Wednesday while Citigroup and JPMorgan shares each fell 0.8%.

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Joining the U.S. Air Force right out of high school, Jon had the opportunity to experience many different parts of the world and different cultures. His post military career path, both white collar and blue collar, allowed him to work alongside both CEOs and average Joes. “Writing was never a goal or even vaguely contemplated as a career choice, it just happened, an accidental discovery of a talent and a passion.” A passion that has taken him in many directions from explorations of the zombie subculture and writing zombie stories to politics and News. He is an avid “people watcher,” political junkie and has a ravenous appetite for history and current events alike.

About the Author

Jon Britton
Joining the U.S. Air Force right out of high school, Jon had the opportunity to experience many different parts of the world and different cultures. His post military career path, both white collar and blue collar, allowed him to work alongside both CEOs and average Joes. "Writing was never a goal or even vaguely contemplated as a career choice, it just happened, an accidental discovery of a talent and a passion." A passion that has taken him in many directions from explorations of the zombie subculture and writing zombie stories to politics and News. He is an avid "people watcher," political junkie and has a ravenous appetite for history and current events alike.
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