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BNP Paribas bill for forex breaches rises to $600m

The fallout from investigations into foreign exchange price fixing deepened on Monday when US authorities hit BNP Paribas with a new fine and former traders at three other banks appeared in court over an alleged conspiracy.

The Federal Reserve joined New York state bank regulators in penalising BNP Paribas over misconduct in the markets that took place over six years, bringing the bank’s bill for the episode to almost $600m.

Traders at France’s biggest bank by assets used electronic chat rooms to collude with competitors, the Fed said on Monday. Employees sought to co-ordinate trading strategies with peers at other banks and disclosed confidential customer information as well as their own positions, it said.

BNP said it “deeply regrets the past misconduct, which was a clear breach of the high standards on which the group operates”.

Separately on Monday, three former currency traders made their first appearances before a US judge to face charges in connection with a sprawling probe into the rigging of forex benchmarks.

Christopher Ashton of Barclays, Rohan Ramchandani of Citigroup and Richard Usher of JPMorgan Chase are accused of being part of a group dubbed “the Cartel” in which they schemed to rig bids for US dollars and euros in the forex spot market.

The three Britons opted not to fight extradition and appeared voluntarily. Their lawyers entered pleas of not guilty during the brief hearing in a Manhattan federal court.

Banks have already paid billions of dollars in penalties for allowing traders to seek to influence prices in forex markets. The practice has triggered multiple civil settlements and criminal probes in both the US and UK.

The Fed said on Monday that BNP had failed to spot and put a stop to the misconduct. It levied a $246m fine on BNP for “unsafe and unsound practices” and ordered it to tighten controls over its trading in forex markets.

The latest fine follows a $350m penalty that the New York’s Department of Financial Services slapped on BNP in May over the same issues, which lasted between 2007 and 2013.

At least a dozen BNP employees in New York and other foreign exchange trading hubs, including London and Tokyo, were involved in the misconduct, the DFS said. All had quit, been sacked or otherwise disciplined.

The French bank said it had “proactively implemented extensive measures to strengthen its systems of control and compliance” since the conduct in question took place. BNP would not say whether it was facing further action against it by other regulators.

In January, BNP Paribas trader Jason Katz pleaded guilty to participating in a price-fixing conspiracy in the forex markets. The Fed barred him permanently from working in the banking industry.

The latest fine will be comfortably covered by BNP’s legal provisions, which stood at over €1.6bn at the end of last year.

BNP has moved from strength to financial strength over the past two years, raising its dividend and boosting profits since being fined almost $9bn by US regulators in 2014. The group, which reports half-year results next week, said that net income was up 4.4 per cent in the first three months of the year to €1.89bn.