Traders from Barclays, RBS, Citigroup, JPMorgan and MUFG who used chat rooms to fix the spot forex market have cost their employers EUR1.07 billion in fines following an investigation by EU antitrust authorities,.
The traders, who were direct competitors, typically logged in to multilateral chatrooms on Bloomberg terminals for the whole working day, and had extensive conversations about a variety of subjects, including recurring updates on their trading activities.
The chat rooms - operating under the colourful names of the 'Essex Express' and 'Banana Split' - were used to swap information on a variety of sensitive data, including bid/ask spreads, outstanding customer orders and open risk positions. In some case, traders would agree to stand down, temporarily refraining from trading activity to avoid interfering with another trader within the chatroom.
The extent of the collusion - which took place over a five-year period between 2007 and 2012 - was revealed to the Commission by UBS, which received full immunity and avoided an aggregate fine of €285 million.
The Banana Split cartel, which involved traders from Barclays, RBS, JPMorgan and Citigroup - faced the heaviest sanctions, with the imposition of fines totalling over EUR811 million. The Essex Express group, comprising dealers at Barclays, RBS and MUFG Bank, faced charges of EUR258 million.
Commissioner Margrethe Vestager, in charge of competition policy says: “These cartel decisions send a clear message that the Commission will not tolerate collusive behaviour in any sector of the financial markets. The behaviour of these banks undermined the integrity of the sector at the expense of the European economy and consumers”.