OCC Fines Citigroup, J.P. Morgan, Bank of America Over Foreign Exchange

   By Christina Rexrode 
 

The Office of the Comptroller of the Currency fined the three biggest U.S. banks by assets a combined $950 million on Wednesday, saying that Bank of America Corp., Citigroup Inc. and J.P. Morgan Chase & Co. tried to manipulate the foreign-exchange market to boost their own profits.

Citigroup and J.P. Morgan will pay $350 million each and Bank of America will pay $250 million.

The OCC also ordered the banks to shore up their systems for how they monitor foreign-exchange traders and detect bad behavior, and said that misdeeds by traders went undetected by the banks for years. The three banks did not admit or deny wrongdoing, but agreed to comply with the OCC's orders.

The OCC's announcement came just nine hours after the U.K.'s Financial Conduct Authority and another U.S. regulator, the Commodity Futures Trading Commission, announced foreign-exchange settlements with five banks, including Citigroup and J.P. Morgan. Bank of America was not a part of those settlements.

The OCC's findings echoed those of the FCA and the CFTC: According to the OCC settlements, traders colluded with colleagues at other banks, communicating via online chat rooms to discuss how they could manipulate the rates for their own benefit and sharing confidential information about their clients' orders.

The regulator ordered the banks to tighten their methods for monitoring their foreign-exchange traders and rooting out potential bad behavior. For example, the OCC requires them to develop formal processes for sharing news of potential problems across their audit departments, and to review what other trading activities could raise similar market concerns.

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