Washington - BNP Paribas, whose subsidiary is accused of rigging the rand in SA, agreed to pay $246m to settle Federal Reserve allegations that the bank failed to keep its currency traders from using electronic chatrooms to manipulate prices.
The Fed ordered the Paris-based lender to improve its oversight and internal controls for foreign-exchange trading. BNP Paribas also agreed to $350m settlement in May with the New York Department of Financial Services over the deficiencies.
Global banks have faced billions in fines, regulatory sanctions and legal challenges over the use of chatrooms to influence currency rates, and some of the individuals involved were the targets of criminal prosecutions. Earlier this year, a former BNP Paribas trader, Jason Katz, pleaded guilty to violating federal antitrust laws. The Fed barred him from the US banking industry in January.
“BNP Paribas deeply regrets the past misconduct, which was a clear breach of the high standards on which the group operates,” the bank said in a statement on Monday. The lender has since put in place “extensive measures to strengthen its systems of control and compliance” and introduced a new code of conduct for employees.
It said the fine would be covered by existing provisions.
The Fed’s order, focused on the six years through 2013, said the bank’s “deficient policies and procedures prevented it from detecting and addressing unsafe and unsound conduct by certain FX traders, including in communications by traders in multibank chatrooms”.
BNP Paribas is the latest in a line of banks fined in currency probes. In May 2015, Citigroup, Barclays, JPMorgan Chase & Co and Royal Bank of Scotland pleaded guilty to rigging currency rates in a $5.8bn settlement with multiple regulators.
Fourteen banking entities, including HSBC Holdings Plc, BNP Paribas SA, Credit Suisse Group AG and JPMorgan Chase & Co. were named as having been allegedly involved in illegal rand trades in South Africa.
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