The Blog Of The Securities Industry Professional Association

6 billion settlement but no failure to supervise?


Today a major announcement was made regarding some of the largest banks in the world:

YORK/LONDON/ZURICH (Reuters) – Four major banks pleaded guilty on Wednesday to trying to manipulate foreign exchange rates and six banks were fined a total of nearly $6 billion in a settlement that substantially ends a global probe into misconduct in the $5-trillion-a-day market.

In total, authorities in the United States and Europe have fined seven banks over $10 billion for failing to stop their forex traders from sharing confidential information about client orders and coordinating trades to boost their own profits.

Traders at Citigroup , JP Morgan , Barclays and Royal Bank of Scotland , who described themselves as “The Cartel”, used an invitation-only electronic chatroom and coded language to manipulate the price of U.S. dollars and euros between December 2007 and January 2013, according to U.S authorities.


Despite this enormous settlement that exceeds the GDP of about 75% of the world’s countries, there is no Failure to Supervise charges at any of these institutions nor is there an actual BAR of any employees.  If you read the release, ” 8 employees were fired” but they were not formally barred for life from the Financial industry.  How is it that 8 employees can conduct a fraud of this magnitude without a supervisor or two knowing about it?  In addition, since this was a fraud of epic proportions, shouldn’t FINRA and the SEC be investigating the firms involved and following the recently released  NAC sanction guidelines and recommending a BAR from the securities industry for Citigroup, J.P. Morgan and the rest?   If you are going to revise the sanctions you have to start enforcing them and we think right now would be a good time to send a message to recidivist offenders of fraud like JP and Citi.  What do you think?  Your comments as always are welcomed.


Post Metadata

May 20th, 2015



Comments are closed.