A report on Monday from The Korea Times indicates that South Korean regulators are still investigating JP Morgan Chase and Citibank’s involvement in a pricing manipulation scandal that took place at the start of this decade.
The Fair Trade Commission (FTC) – Korea’s anti-trust regulator – has already handed out a number of fines to firms involved in the scandal, though it must be said they have been minuscule when compared to other similar fines given by US regulators in response to the 2013 forex scandal.
Most notably, Deutsche Bank AG and BNP Paribas were fined 71 million won ($63,000) and 105 million won ($93,000) respectively for their role in the debacle. When issuing the fine last year, the FTC said that the two companies had been manipulating forward currency contract prices from 2011 to 2014.
Working together, the two companies manipulated bid prices, on 45 occasions, for contracts companies were looking to buy for hedging purposes. By doing this, the two banks could take turns in winning the contracts – and give their clients a bad deal.
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JP Morgan & Citibank – Still under Scrutiny
The report released by The Korea Times on Monday indicates that JP Morgan Chase and Citibank are under investigation for allowing their employees to engage in similar behavior.
“Those two are included,” an FTC official is quoted as saying, “in the ongoing assessment of a long line of allegations that have yet to be resolved.”
Separate from the FTC, the Financial Supervisory Service (FSS), South Korea’s financial regulator, appears also to be conducting its own investigation into the rigging. According to The Korea Times, that investigation is ongoing.
How it will turn out is also less clear, but it is unlikely that either JP Morgan or Citibank will be crippled by a massive fine. Just last month the FSS handed out its biggest ever fine to Goldman Sachs for violating short selling regulation.
That fine totaled 2 billion won ($1.78 million) – certainly not nothing but small change when compared to other regulators’ efforts.