BNP Paribas Fined $246 Million by Fed over Rigging of Forex Markets

BNP Paribas has been slapped with a $246 million fine by the US Federal Reserve board, which found a long pattern of "unsafe and unsound practices in the foreign Exchange (FX) markets."

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The Fed also ordered France’s biggest bank on Monday to put in place a program to ensure that the alleged violation doesn’t happen again.

The board said: “The bank had insufficient oversight and controls over its FX traders, who allegedly discussed trading positions with competitors, using electronic chatrooms.”

Earlier in May, the New York regulator accused more than a dozen traders and salespeople working for the Paris-based bank of manipulating the $5.3 trillion a day Forex market and other illegal activity over the course of six years. BNP Paribas has since agreed to pay $350 million to make up for the misconduct.

The US central bank found that the bank’s traders, using different names to disguise client requests for quotes and trading activity, shared information and conspired to move currency benchmarks, including the so-called 4 p.m. fix in London.

Other banks have also faced huge fines for allowing their traders to club together to rig prices in FX markets. Last year, four banks – Barclays, Royal Bank of Scotland, Citigroup and JP Morgan Chase – pleaded guilty to conspiracy to rig the foreign exchange market and fines totalling $5.6 billion were handed down by the US Department of Justice.