The Fair Trade Commission (FTC), South Korea’s financial market watchdog, has fined four major global banks for illegally sharing information and indulging in unfair price bids to win foreign exchange derivatives contracts from five Korean companies, according to a Korea Times report.
The four banks are JPMorgan Chase, HSBC, Deutsche Bank, and Standard Chartered Bank.
In total, the regulator has imposed 693 million won (around $616,000) in fines on the four banks. JPMorgan Chase has to pay the largest share with 251 million won ($223,000), followed by HSBC with a 225 million won fine. Deutsche Bank and Standard Chartered Bank have been slapped with a fine of 212 million won ($188,000) and 5 million won ($4,500) respectively.
In addition, the FTC has also warned the banks of severe consequences if any such practices are repeated in the future.
The South Korean authorities initiated local investigations against major financial bodies amid the infamous global baking scandal by big banks known as “the cartel.” This move came as a part of a probe by the Financial Supervisory Services (FSS) on a series of cases involving investment banks’ price rigging of forex derivatives contracts.
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The four banks conspired seven times with five companies from March 2010 to February 2012 to sell currency contracts. The regulator, however, did not reveal the names of the five companies involved with the banks.
The banks also cooperated among another to manage their contracts. Bank employees even shared price quotes with each other over public messaging platforms.
The FTC believes that its move against the banks will bring back market order and will encourage companies to fair competition while dealing with currency derivatives.
This is not the first time the FTC has fined banks for forex rigging as last year, Deutsche Bank AG and BNP Paribas were fined 71 million won ($63,000) and 105 million won ($93,000) respectively for manipulating forward currency contract prices from 2011 to 2014.
Earlier this month, JP Morgan Chase was slapped with a HKD 12.5 million ($1.6 million) fine by the Hong Kong regulator for not adhering to anti-money laundering laws over a two-year period.