Banks – including RBS – head to Conn. to seal currency probe deal

BRIDGEPORT, Conn. – Lawyers for JPMorgan Chase & Co., Barclays PLC, and units of Citigroup Inc. and Royal Bank of Scotland Group PLC filed into a courtroom some 60 miles northeast of Manhattan to admit to a global conspiracy to manipulate currency markets.

More than a dozen attorneys filled the well of the windowless courtroom in Bridgeport, Conn. Among then was former Chicago U.S. Attorney Patrick Fitzgerald, representing New York-based JPMorgan as a partner at Skadden Arps Slate Meagher & Flom.

U.S. District Judge Stefan Underhill spent an hour going over the agreements, eventually accepting guilty pleas from each bank on one count of violating federal antitrust law. The charge carries a maximum punishment of five years of probation, a fine of $100 million or twice the profit from the crime or loss suffered by victims, whichever is greater, Underhill said.

Deals

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Under the plea deals, London-based Barclays will pay $650 million to the Justice Department, as well as an additional $60 million for breaching an earlier agreement involving a probe into interest rate rigging, Justice Department lawyer Joseph Muoio said. New York-based Citigroup agreed to pay $925 million; JPMorgan will pay $550 million and U.K.-based RBS $395 million (RBS is still in the process of spinning off Providence-based Citizens Bank). Each bank also faces three years of probation.

Summarizing the behavior behind the plea deals, Muoio told the judge that euro-dollar traders at the four banks, describing themselves as members of a group they called “The Cartel,” conspired between December 2007 and January 2013 to manipulate benchmark exchange rates.

The traders agreed to withhold bids or offers for euros or dollars to avoid moving the exchange rate in a direction that would harm their positions.

“They knowingly participated in this conspiracy,” Muoio said. The hearing took place in Connecticut, he said, because the crimes were conducted in part in the state.

In a different federal courthouse, in Hartford, Conn., UBS AG pleaded guilty Wednesday before U.S. District Judge Robert Chatigny, Peter Carr, a spokesman for the Justice Department, said in an email. The bank was to plead guilty to a wire fraud count related to interest rate manipulation.

UBS Group AG agreed to pay $545 million to settle U.S. investigations into its role in manipulating currency and interest rates.

Sentencing for UBS is scheduled for Nov. 9, while sentencing dates for the other banks haven’t been set, Carr said.

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