French banking giant BNP Paribas has come to terms with the New York’s Department of Financial Services, settling for a sum of $350 million to the regulator after failing to properly supervise its global FX business.
The settlement is the latest for BNP Paribas, which has done a fine enough job of staying out of any trouble in recent months. Indeed, the group has largely steered clear of fines in the banking sector, with other rival lenders seeing the majority of attention for other transgressions. The last major setback the group suffered was last year when the SEC imposed a $4.0 million fine on its Wealth Management Unit.
Its most recent legal issue however stemmed from its allowing more than a dozen traders and salespeople to successfully manipulate FX prices, according to a Reuters report. This was accomplished due to failed supervisory measures, which were unable to properly monitor the individuals responsible for manipulation in New York.
The New York’s Department of Financial Services determined that a few BNP traders and salespeople managed to collude in online chat rooms with the ultimate intent of manipulating the currency prices. As such, traders executed fake trades to influence exchange rates across select emerging market currencies, also improperly sharing confidential customer information with traders at other large banks.
The actual period of the misconduct dated back to between 2007 and 2011, per a regulatory statement. As the measures took place around a decade ago, BNP Paribas likely avoided an even larger fine given that several of these employees have already been terminated, while the bank also pledged to improve its oversight measures.