October 07, 2014
The Justice Department is planning to investigate and charge several of the world’s largest banks with crimes connected to the manipulation of currency exchanges, according to a published report.
According to The New York Times, federal prosecutors are planning to indict individual bank employees for currency manipulation, using instant messages as evidence. That is in contrast to recent investigations into securities-backed mortgage trading, which ended in multi-million dollar fines being paid by the banks themselves.
The Times reports that approximately a dozen financial institutions under investigation, including Deutsche Bank, Citigroup, JP Morgan Chase, Barclays, and UBS. Charges are expected to be filed against at least one bank before the end of the year, with several expected to plead guilty.
The Times also reports that any individuals charged in connection with currency manipulation would likely be traders and their immediate superiors, as opposed to chief executives of firms.
Meanwhile, the Wall Street Journal reported that American and British regulators are in talks with Deutsche Bank to resolve a probe into allegations that the firm manipulated the benchmark London interbank offered (Libor) interest rate to make money on trades. The Journal reports that the amount paid by Deutsche Bank could reach hundreds of millions of dollars.
The Justice Department has targeted several banks for investigation of actions connected to the 2008 financial crisis. Earlier this year, Bank of America paid $16.7 billion to settle charges that it misled investors into buying risky mortgage-backed securities. Similar investigations were settled with payouts of $13 billion from JP Morgan Chase in November 2013 and $7 billion from Citigroup this past July.