Recent news articles about alleged money laundering and other criminal acts by major banks, exposed in the investigation of Russian interference in the 2016 presidential election, are upsetting to most Americans who would like to think their banking institutions are above such conduct. But history tells us a different story.
The following article in CMC Digest on May 20, 2015 relates to $5.7 billion in fines levied on five major banks for manipulating foreign exchange rates. As to the current charges relating to major banking institutions, you can make up your own mind.
Beau Weisman, Editor
Five Global Banks Plead Guilty to Manipulating Foreign Exchange Rates
The U.S. Department of Justice announced May 20 that five of the world's largest banks have been fined a total of $5.7 billion for manipulating foreign exchange rates. Four of the banks, including JPMorgan Chase & Co., Citigroup, Barclays and the Royal Bank of Scotland, have agreed to plead guilty to the charges. The fifth bank, UBS AG, will plead guilty to rigging benchmark interest rates. The $5.7 billion in fines includes $1.6 billion separately imposed by the U.S. Federal Reserve on the five banks.
U.S. banks JPMorgan Chase and Citigroup will pay $550 million and $925 million respectively in criminal fines as part of their guilty pleas. British bank Barclays will pay $650 million in criminal penalties, while the Royal Bank of Scotland will pay $395 million. Each will plead guilty to one felony count of conspiring to fix prices and rig bids for U.S. dollars and euros in the foreign exchange spot market.
Barclays also will pay an additional $1.3 billion to settle with the New York State Department of Financial Services, the U.S. Commodity Futures Trading Commission and the UK's Financial Conduct Authority. As part of the New York banking regulator's agreement, Barclays will fire eight bank employees involved with rigging foreign exchange rates.
If all of this sounds familiar, it should. Last year around this time JPMorgan Chase was fined $13 billion; Bank of America was fined $16.65 billion; Citigroup was fined $7 billion and Credit Suisse $2.6 billion in relation to mortgage securities scandals. Articles on the Bank of America, Citigroup and Credit Suisse fines can be found in the "Topics" section under "business." For the JPMorgan fine, see "What A Great County. You Can Pick Your Own Reality."
Barclays Bank also has a history of criminal activity. It was fined 50 million English pounds for "reckless" behavior in 2008; $453 million for energy market rigging in 2012, and 26 million English pounds for gold fixing in 2014.
In all of this criminal activity, no one has gone to jail to the best of our knowledge. The fines paid by the banks have probably come at the expense of the shareholders and the phrase "Too big to fail," referring to the banks, has morphed into "Too big to jail."
Iceland, on the other hand, has taken a more aggressive approach to wrong-doing by bankers. See "Twenty-Six Bankers Found Guilty And Sent to Jail in Iceland."