After multiagency examinations and investigations of their activities in the global FX market, Bank of America (BofA) was ordered to pay $250m, while Citibank and JPMorgan Chase Bank, each, will pay $350m to settle the matter.
The OCC has also issued cease and desist orders requiring the banks to correct deficiencies and enhance oversight of their FX trading activity.
OCC Currency Comptroller Thomas Curry said: "The enforcement actions we are issuing today make clear that the OCC will take forceful action, not only when the institutions we supervise engage in wrongdoing, but when management fails to exercise the oversight necessary to ensure that employees follow laws and regulations intended to protect customers and maintain the integrity of markets.
"These enforcement actions were taken because several large banks permitted an environment to develop in which unscrupulous traders discussed manipulating foreign exchange markets."
According to OCC, the banks failed to identify or prevent employee misconduct related to FX sales and trading between 2008 and 2013.
In particular, the OCC investigation found that some of the banks’ traders held discussions in online chat rooms about coordinating FX trading strategies to manipulate exchange rates to benefit them or the bank during the specified timeframe.
In addition, the traders allegedly disclosed confidential bank information, including customer orders and rate spreads.
Concurrent with the OCC’s enforcement action, the US Commodity Futures Trading Commission and the UK Financial Conduct Authority took actions against some of these banks for improprieties related to their FX trading activities.
Image: JP Morgan is one of the three US banks fined by OCC over unsafe or unsound practices related to FX trading businesses. Photo: JeremyA.
