Tag: chase
Six Major Banks Fined $4.3 Billion For Attempted Currency Manipulation

Six Major Banks Fined $4.3 Billion For Attempted Currency Manipulation

By Jim Puzzanghera and Dean Starkman, Los Angeles Times (MCT)

This story has been updated.

WASHINGTON — In another black eye for the financial industry, U.S., British and Swiss regulators on Wednesday fined JPMorgan Chase & Co., Citigroup, Bank of America Corp. and three other global banks a total of about $4.3 billion to settle investigations into attempted manipulation of foreign exchange rates.

The fines, including the largest ever issued by Britain’s Financial Conduct Authority, are the latest multibillion-dollar hit to the industry in the wake of alleged misconduct in the 2008 financial crisis and attempts to rig major international markets.

“The setting of a benchmark rate is not simply another opportunity for banks to earn a profit,” said Aitan Goelman, director of enforcement at the U.S. Commodity Futures Trading Commission.

“Countless individuals and companies around the world rely on these rates to settle financial contracts, and this reliance is premised on faith in the fundamental integrity of these benchmarks,” he said.

“The market only works if people have confidence that the process of setting these benchmarks is fair, not corrupted by manipulation by some of the biggest banks in the world,” Goelman said.

The CFTC settlement included a total of $1.48 billion in fines: $310 million each for JPMorgan Chase Bank and Citibank; $290 million each for the Royal Bank of Scotland and UBS; and $275 million for HSBC Bank.

British regulators hit the five firms with a combined $1.7 billion in fines, and the Swiss Financial Market Supervisory Authority levied a $138 million fine against UBS.

Several hours after those fines were announced, the U.S. Office of the Comptroller of the Currency said it fined JPMorgan and Citibank $350 million each and also fined Bank of America $250 million for “unsafe or unsound practices” related to their foreign exchange businesses.

The settlements end investigation into attempted manipulation of benchmark foreign exchange rates to benefit the positions of traders at the banks, regulators said.

Citigroup said Wednesday it had “acted quickly upon becoming aware of issues in our foreign exchange business” and has changed its systems and monitoring “to better guard against improper behavior.”

Barclays, another global bank under investigation in the foreign exchange probe, declined to take part in the settlement. Britain’s Financial Conduct Authority said it was continuing to investigate the bank.

About $5.3 trillion changes hands each day in the foreign exchange market, one of the world’s largest, with about 40 percent of the trades taking place in London, the agency said.

From Jan. 1, 2008, until Oct. 15, 2013, “ineffective controls at the banks” allowed their traders to put the firms’ financial interests ahead of clients’ in the market, the Financial Conduct Authority said.

The traders shared confidential information about clients’ activities and colluded with traders at other banks to manipulate foreign exchange rates.

“Traders at different banks formed tightknit groups in which information was shared about client activity, including using code names to identify clients without naming them,” the FCA said. These groups were described as, for example, “‘the players,” “the 3 musketeers,” “1 team, 1 dream,” “a co-operative” and “the A-team,” the agency said.

Some of the manipulation occurred at the same time regulators were investigating possible manipulation of another benchmark, the London interbank offered rate, also known as Libor, which helps set interest rates around the world.

“Firms could have been in no doubt, especially after Libor, that failing to take steps to tackle the consequences of a free-for-all culture on their trading floors was unacceptable,” said Tracey McDermott, the Financial Conduct Authority’s director of enforcement and financial crime.

“If they fail to do so, they will continue to face significant regulatory and reputational costs,” she said.

With the latest action, the CFTC said it has fined banks more than $3.34 billion since 2012 for attempted manipulation of global financial benchmarks.

London-based Barclays said Wednesday it had “engaged constructively” with regulators, including the FCA and the CFTC, and had “considered a settlement on closely similar terms to those announced the morning.”

“However, after discussions with other regulators and authorities, we have concluded that it is in the interests of the company to seek a more general coordinated settlement,” the bank said.

A person familiar with the matter said Barclays was holding out because it could not reach agreement with New York’s Department of Financial Services, headed by Benjamin Lawsky, who had set tougher conditions for a settlement, including a demand to install monitors within the bank.

The New York regulator, which has jurisdiction over foreign banks charted in New York State, is probing a dozen banks in its foreign exchange probe, including Deutsche Bank.

Supreme Court Upholds Police Shooting After High-Speed Car Chase

Supreme Court Upholds Police Shooting After High-Speed Car Chase

By David G. Savage, Tribune Washington Bureau

WASHINGTON — The police may use deadly force to shoot and kill a motorist who leads them on a reckless, high-speed chase, even if the suspect’s car is temporarily cornered, the Supreme Court ruled Tuesday.

In a unanimous decision, the justices threw out an “excessive force” claim brought against Arkansas police officers who chased a speeding car across the bridge into Memphis and shot the driver when he refused to give up.

In the past, the court had said police may use force to stop a fleeing motorist because he represents a danger to the public. But the law has been unclear on whether “deadly force” can be used against the occupants of a stopped car.

In the case decided Tuesday, Justice Samuel A. Alito Jr. said the officers were justified in shooting the motorist because he continued to maneuver his car after he had been temporarily stopped by a squad car. As the motorist, Donald Rickard, tried to drive away, police fired 15 shots in all, killing him and a passenger.

Alito also said officers deserve the benefit of the doubt when they are engaged in a high-speed pursuit. “We analyze this question from the perspective of a reasonable officer on the scene, rather than with the 20/20 vision of hindsight,” he wrote in Plumhoff v. Rickard.

The case began on a summer night in 2004 when officers in West Memphis, Ark., pulled over a white Honda because the car had only one headlight. When an officer sought to question the driver, he sped away.

The chase reached 100 miles per hour when Rickard crossed the bridge into Memphis. Sgt. Vance Plumhoff led the pursuit and collided with the fleeing vehicle, sending it spinning into a parking lot.

Though Rickard’s car was cornered, he put it into reverse and spun the wheels. When Rickard refused to surrender, Plumhoff fired three shots into the vehicle. The car then spun away, and officers fired more shots, killing the driver and his passenger.

Rickard’s daughter sued, alleging the officers violated the Fourth Amendment by using “excessive force” to make an arrest. A federal judge and the 6th Circuit Court of Appeals allowed the suit to proceed on the theory that a jury should decide whether the shooting was excessive.

But the Supreme Court decided there was no constitutional violation. “It is beyond serious dispute that Rickard’s flight posed a grave public safety risk, and here the police acted reasonably in using deadly force to end that risk,” Alito wrote. It would be “a different case,” he added, if the initial shots “had clearly incapacitated Rickard” or “if Rickard had clearly given himself up.”

“But that is not what happened,” he concluded.

©afp.com / Joe Raedle