Brussels (Brussels Morning Newspaper) – The European Union’s General Court lowered on Wednesday a fine levied on Credit Suisse to 28.9 million euros from a prior 83.2 million euros forfeiture, over its involvement in a cartel in the foreign exchange trading market.
The European Commission previously fined Credit Suisse €83.2 million for participating in a cartel that influenced the foreign exchange spot market for several currencies. The court said that Credit Suisse did partake in the cartel, but also said that the European Commission did not accurately specify the amount of the fine.
The European Commission had fined Credit Suisse and other banks for being part of a cartel to manipulate the foreign exchange (forex) spot trading market of G10 currencies.
How were traders coordinating illegal forex strategies?
The Commission found that the traders employed by the banks exchanged sensitive information and trading intentions with one another, and at times coordinated their trading strategies, including deciding whether and when to buy or sell currencies. The traders engaged in the collusive conduct mostly in online chatrooms, one of which was called “Sterling Lads.”
This activity allowed these traders to make collective decisions in the market, thereby reducing competitive risk, as well as affecting and hurting the fairness of the financial market. This coordination harmed the EU economy at the cost of consumers, and was an infringement of EU competition law.
When was the fine imposed?
The fine was imposed on 2 December 2021. That day, the European Commission released the final findings of its cartel investigation in the area of forex spot trading as a means to sanction UBS, Barclays, RBS, HSBC, and Credit Suisse. The fine given to Credit Suisse was €83.2 million, imposed under the Commission’s ordinary procedure, as the bank did not settle the case.
What are other instances of EU fines for forex manipulation?
Besides the moves made recently against Credit Suisse, the European Commission also fined some of the world’s largest banks for manipulating the foreign exchange (forex) spot market, in similarly high-profile cases.
In May 2019, the Commission fined five global banks- Barclays, Citigroup, JP Morgan, Royal Bank of Scotland (RBS), and MUFG- €1.07 billion overall, for being part of two illegal cartels in the forex spot trading market. These cartels were called the “Three Way Banana Split” cartel, and the “Essex Express” cartel.
