JP Morgan, Citigroup and other 2 big banks found guilty of criminally manipulating markets in 2007

[alhoon]

http://finance.yahoo.com/news/banks-...140901678.html

A group of 4 banks, JPMorgan Chase, Citigroup, Barclays and The Royal Bank of Scotland, were fined 2.5 Billion $ after they pleaded guilty to conspiring with one another to manipulate the global currency markets. More or less, they conspired between themselves making strategy and sharing customer orders to fix rates on U.S. dollars and euros traded in the global market for currencies, using the shared information to illegally make billions.


I'm not surprised that big banks conspired between themselves to make profits in the shady part of the law, "Transcending" (I.e breaking) the law at points. I'm more surprised they were cought and that they will pay billions for it. I expected more like a slap of the hand, a couple of executives taking the whole blame and being sent to jail for a couple of years and a fine about 20-30 millions for the banks.

[Condottiere 40K]

105
You have to jail the board of directors and penalize the shareholders, to put enough fear of God in better corporate governance.

[Denny Crane!]

2.5 billion dollars split between them isn't that big a punishment, did you say some of them are going to jail?

How long does an individual man who commits fraud go down for and how long did they get comparatively?

[alhoon]

did you say some of them are going to jail?

I did not. I said I expected some of them would go to jail but I don't know who, how many, when and if.

105
You have to jail the board of directors and penalize the shareholders, to put enough fear of God in better corporate governance.

I'm not sure it would work. It would probably just create an environment like the Drug dealers. You have 15 years of paranoia and you know you'll probably won't die from old age.
I.e. huge banks would continue pulling such stunts, their important shareholders would keep doing it, even if they know there's a big risk going to jail. We're talking about billions of profits here. Many would risk jail for such money.

[Papay]

No problem. They will pay from the profits they gain by manipulating the market now

[Denny Crane!]

I did not. I said I expected some of them would go to jail but I don't know who, how many, when and if.

See I"ve been looking and I can't see a single indication that they will prosecute a single soul. You would think they would.

[alhoon]

The banks pleaded guilty. Someone will end up in jail I expect.

[Gaidin]

The banks pleaded guilty. Someone will end up in jail I expect.

Tell me how someone ends up in jail for a plea bargain for money. Educate me. Please.

[Denny Crane!]

The banks pleaded guilty. Someone will end up in jail I expect.

Show me where anyone is being considered for prosecution.

Tell me how someone ends up in jail for a plea bargain for money. Educate me. Please.

If criminal behaviour occurred according to the legal system of the countries where the events happened...?

[Gaidin]

If criminal behaviour occurred according to the legal system of the countries where the events happened...?

Yes, yes, we're seeing the American smash and grab of these banks, and all other countries involved in there screwing around can do something different. But there is absolutely no hint of that right now. Until there is any hint of that, I do not care to pull a wild ass guess out of my ass. Thanks.

Now there's one important pattern being established here. The banks did more than one thing we can otherwise consider criminal in the American legal system. Everybody has been like "chump change" over and over each time a single number has been stated. I'm just curious. Anybody care to take a wild ass guess at what the summation is going to be? Or just at the idea that it might be a worthwhile number in and of itself?

[Basil II the B.S]

The banks pleaded guilty. Someone will end up in jail I expect.

Nah.
http://www.wsj.com/articles/global-b...=djemalertNEWS

No traders have yet been criminally charged over the conduct, but New York’s financial regulator said it required Barclays to fire eight employees in connection with the resolution. Investigations into individuals are continuing, according to government officials.

https://s3.amazonaws.com/s3.document...n-currency.pdf

One particular chat room, referred to by the participating traders and other traders as the “Cartel” included FX traders from Citigroup, JP Morgan, UBS, RBS and Barclays who specialized in trading the Euro.


One Barclays FX trader, when he became the main Euro trader for Barclays in 2011, was desperate to be invited to join the Cartel because of the trading advantages from sharing information with the other main traders of the Euro. After extensive discussion of whether or not this trader “would add value” to the Cartel, he was invited to join for a “1 month trial,” but was advised “mess this up and sleep with one eye open at night.”

On one occasion, a Barclays FX trader explicitly discussed with a JP Morgan trader coordinating the prices offered for USD/South African Rand to a particular customer, stating, in a November 4, 2010 chat, “if you win this we should coordinate you can show a real low one and will still mark it little lower haha.” After the JP Morgan trader suggested that they “prolly shudnt put this on perma chat,” the Barclays trader responded “if this is the chat that puts me over the edge than oh well. much worse out there.”

On June 10, 2011, the Barclays trader stated explicitly in another chat that “we trying to manipulate it a bit more in ny now . . . a coupld buddies of mine and I.”

As the future Co-Head of UK FX Hedge Fund Sales (who was then a Vice President in the New York Branch) wrote in a November 5, 2010 chat: “markup is making sure you make the right decision on price . . . which is whats the worst price i can put on this where the customers decision to trade with me or give me future business doesn’t change . . . if you aint cheating, you aint trying.”

The fine is a mere appeasing for the dumb crowd.
Noone charged. Noone in jail. No regulation changed. A complete farce.

2.5 billion dollars split between them isn't that big a punishment, did you say some of them are going to jail?

In 5$ Trillion a day market.
Pffffffffffffffffffffffffffffffffff.

[Jedi1]

Though at first a figure as large as $2.5 billion may appear to be a substantial penalty, if we examine what these banks make every year the picture painted is rather different. Barclays alone reported adjusted profits of 5.5bn pounds, in 2014, reduced to 2.26bn only after making provision for various fees and charges which include the fallout from this investigation which for them only amounts to $710 million US. The RBS reported making 2.643bn pounds before tax in 2014 and is only liable for $293 million US. Citigroup reported a net income of $7.3bn US for 2014 and is only paying $925 million US. And UBS is play $545 million US in two separate fines while it made $3.466 billion US in 2014(links to annual report PDF download). And to top it off JP Morgan reported $21.8bn US in 2014 as its net profit , it could have covered the entire indemnity itself out of that and would still have had $19.3bn US in profit, but of course its only liable for $550 million US.

So while these fines may not be small enough to be classified as a slap on the wrist for most of these banks at least, they certainly don't represent a true deterrence, they are just another cost of doing business and probably less than these banks calculated it would cost to contest the charges in a drawn out legal battle.

[Denny Crane!]

Yes, yes, we're seeing the American smash and grab of these banks, and all other countries involved in there screwing around can do something different. But there is absolutely no hint of that right now. Until there is any hint of that, I do not care to pull a wild ass guess out of my ass. Thanks.

Now there's one important pattern being established here. The banks did more than one thing we can otherwise consider criminal in the American legal system. Everybody has been like "chump change" over and over each time a single number has been stated. I'm just curious. Anybody care to take a wild ass guess at what the summation is going to be? Or just at the idea that it might be a worthwhile number in and of itself?

I'm sorry can you point out anything actually wrong in my question and try again. In the various countries can criminality be established, its a yes or no question and if so I can't fail to see how it is not in public interest to bring a prosecution. I don't think it deserved derision, I deliberately formed the question as I know you are a stickler for what is and is not relevant to a particular countries legality as to whether or not something should be prosecuted..

So please answer.

[alhoon]

https://s3.amazonaws.com/s3.document...n-currency.pdf

My follow-up question is... who now sleeps with one eye open at night? Cause someone probably messed up and they were found. That someone is probably changing his name right now, leaving hastily for Vietnam...

Anyway, in a more serious tone, all those guys in the room, making threats and conspiracy etc should go to jail in my opinion. OK, I understand that when you conspire with others to cheat a bank for 1M$, it's a conspiracy but when banks conspire between themselves to cheat you (the people) from billions of dollars is just a workday but... Really? Death-threats? Secret cabals? Is that a cheap movie or something?

So while these fines may not be small enough to be classified as a slap on the wrist for most of these banks at least, they certainly don't represent a true deterrence, they are just another cost of doing business and probably less than these banks calculated it would cost to contest the charges in a drawn out legal battle.

Agreed. Is it my fault that I feel disgusted after reading this?

[Condottiere 40K]

1536
And if you can partially make fines tax deductible.

[Denny Crane!]

1536
And if you can partially make fines tax deductible.

Not in my country.

[Jedi1]

My follow-up question is... who now sleeps with one eye open at night? Cause someone probably messed up and they were found. That someone is probably changing his name right now, leaving hastily for Vietnam...

Anyway, in a more serious tone, all those guys in the room, making threats and conspiracy etc should go to jail in my opinion. OK, I understand that when you conspire with others to cheat a bank for 1M$, it's a conspiracy but when banks conspire between themselves to cheat you (the people) from billions of dollars is just a workday but... Really? Death-threats? Secret cabals? Is that a cheap movie or something?




Agreed. Is it my fault that I feel disgusted after reading this?

This isn't a cheap movie, this is the real world that most media wont tell you about and that we are not educated about in school. As previously stated banking is multi trillion dollar industry, it is infact situated at the pinnacle of the economy as through they private monopoly on money creation that banks possess the have effective control the the real economy, the course of which is consequently dictated by the interests of high finance. This fine really isn't for doing the crime when it comes down to it, its for getting caught. When our sportsman are caught rigging games in their industry they are often not only penalized by fines but banned for life for their chosen game. But financial crimes of the same kind of far larger magnitude and impact receive symbolic fines and the individuals responsible invariable get of scot free and continue in their extremely well payed jobs. This is the reality of a world in which we have allowed financial institutions the large corporations to dominate our societies and this will continue to be the case as long as we allow them to continue to do so.

[Gaidin]

I'm sorry can you point out anything actually wrong in my question and try again. In the various countries can criminality be established, its a yes or no question and if so I can't fail to see how it is not in public interest to bring a prosecution. I don't think it deserved derision, I deliberately formed the question as I know you are a stickler for what is and is not relevant to a particular countries legality as to whether or not something should be prosecuted..

So please answer.

I said I'm not taking a guess on countries other than America. There is no word on countries other than America. America has taken a plea bargain. Thus as it stands, no jail. To be succinct, get the over my answer, and either wait for word or do the legal research yourself.

[Roma_Victrix]

Overall, white collar crime like this is way more dangerous than your garden-variety blue collar crime. The latter is fueled by the former anyway, due to the effects felt in the overall economy when the world's largest banks screw us and the rest of society over for their own benefit.

[Basil II the B.S]

To think that a solution would be so simple. In Barclays case the rigging was well known to compliance officers, meaning the employees of the bank that should work to prevent that; thus it's not just a rogue trader or two, it's the entire bank. You want to rig FX trading? Cool, your license for FX trading is suspended or even revoked. Meaning you lose a chunk of profits, and clients who want to do FX trading will look elsewhere. See how convenient it is after that.