Citybank squeals in the case of rand trades manipulation by banks

20 Feb 2017

The South African Competition Commission has reached a settlement agreement with Citibank for being part of the forex trading cartel operated by 17 local and international banks. This means Citibank is squealing. It will help the Commission to prosecute the 16 other culprits in the collusion crime that is said to have manipulated, and even undermined, the value of the rand.
“This settlement was done to encourage speedy settlement and full disclosure to strengthen the evidence for prosecution of the other banks,” said the Commissioner, Tembinkosi Bonakele.
In a statement released today the Commission said it found that from at least 2007, Citibank and its competitors had a general agreement to collude on prices for bids, offers and bid-offer spreads for the spot trades in relation to currency trading involving US Dollar / Rand currency pair. Further, the Commission found that Citibank and its competitors manipulated the price of bids and offers through agreements to refrain from trading and creating fictitious bids and offers at particular times.
Citibank will pay an administrative penalty of R69.5 million. This figure does not exceed 10% of Citibank’s annual turnover in the Republic of South Africa.
Citibank undertook to cooperate with the Commission and avail witnesses to assist the prosecution of the other banks that colluded in this matter.
On 15 February 2017, the Competition Commission referred a collusion case to the Competition Tribunal for prosecution against Bank of America Merrill Lynch International, BNP Paribas, JP Morgan Chase & Co, JP Morgan Chase Bank, Investec, Standard New York Securities, HSBC Bank, Standard Chartered Bank, Credit Suisse Group; Standard Bank of South Africa, Commerzbank; Australia and New Zealand Banking Group, Nomura International, Macquarie Bank, Citibank, ABSA Bank, Barclays Capital and Barclays Bank.

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