November 14, 2014
Banks Get December Deadline to Come Clean on FX Rigging
By David McLaughlin Nov 14, 2014 5:49 AM ET
The U.S. Justice Department has given banks about a month to come clean about wrongdoing as it moves closer to wrapping up an investigation into the rigging of currency benchmarks, a person familiar with the probe said.
The banks have met with officials in recent weeks to lay out how they see their liability, said the person, who asked not to be identified because the discussions are confidential. Prosecutors have demanded a full accounting of any misconduct by mid-December, the person said.
U.S. Attorney General Eric Holder said yesterday the department will finish the currency-trading investigation “relatively soon” and is moving toward civil and criminal resolutions.
The Justice Department is likely to bring cases against banks early next year, followed by charges against individuals, the person said. Prosecutors had been pushing to bring a case against at least one bank before the end of the year.
Investigations by authorities on three continents are proceeding after six banks, including Citigroup Inc. (C), JPMorgan Chase & Co. (JPM) and UBS AG (UBSN), agreed to pay $4.3 billion to regulators in Europe and the U.S. Nov. 12 to settle claims that traders colluded with counterparts at other firms in an attempt to manipulate currency rates.
Barclays Plc pulled out of the group settlement earlier this week after Benjamin Lawsky, the head of New York’s Department of Financial Services, refused to join in the Nov. 12 accords, according to a person familiar with the matter. The banks that reached deals don’t rely on a New York license, leaving Barclays in a unique position to have its settlement delayed by Lawsky’s view that it wasn’t severe enough.
The December deadline and the talks with the banks were reported earlier by the Wall Street Journal.
Regulators released transcripts of chat groups dubbed “the 3 musketeers,” “the A-team” and “1 team, 1 dream,” showing traders sharing client orders and attempting to rig the WM/Reuters currency benchmarks. Traders boasted about “whacking” and “double teaming” the market and congratulating one another when plans paid off.
U.S. prosecutors have been investigating manipulation of currency benchmarks for more than a year. They’re working with the Federal Reserve, as well as Britain’s Serious Fraud Office, which opened an investigation in July. U.K. Chancellor of the Exchequer George Osborne wrote to the prosecutors today saying the agency, which has struggled with funding issues in the past and sought more funds to pursue blockbuster cases, will get the money to “pursue this case as vigorously as possible.”
The Swiss Attorney General is also conducting a criminal investigation against individuals, a spokeswoman for the office said on Nov. 12.
The Justice Department may seek guilty pleas from several firms, including at least one in the U.S., a person familiar with the matter has said. While federal prosecutors have wrested convictions from foreign banks this year, they’ve yet to win a guilty plea from a U.S. lender.
In addition to the criminal and civil probes, antitrust investigators at the European Union, Department of Justice and Swiss Competition Commission are also still looking into the collusion allegations.
To contact the reporter on this story: David McLaughlin in Washington at email@example.com
To contact the editors responsible for this story: Sara Forden at firstname.lastname@example.org Heather Smith, Cindy Roberts
November 14, 2014 at 2:02pm
New International Economic Order
The BRICS Have Opened Up a New World
With Obama having been relegated to irrelevance at the Beijing APEC Summit, the global shift that has been underway over recent weeks is rapidly consolidating.
The BRICS/APEC process has taken over the direction of global politics, and is setting the dynamic, commented Lyndon LaRouche upon reviewing the situation. This opens up new possibilities for those in every country who have been waiting to strip themselves of their pessimism, and join the pathway to progress.
China has taken the lead, and will continue to do so. From the APEC Summit, Chinese Premier Li Keqiang went on to the ASEAN/East Asia summit in Myanmar, where he made a new commitment of $20 billion for development along the Maritime Silk Road. By contrast, Obama came to that same summit like a wrecking ball, demanding that Myanmar change its constitution to suit his and Soros's demands. Is there any question as to which options the nations of the region will choose?
The next step is the G-20, where, this weekend, President Xi Jinping will present his vision of expanding the development process China is leading globally. Obama et al. have been counting on controlling the environment at the G-20, but they've already lost. It is the BRICS/APEC process that is controlling the global environment in which they're operating.
There has even begun to be a visible adaptation in Europe to the new possibilities in this environment. The French are champing at the bit to join the New Silk Road, and German industrialists are looking to investment in India, whose government representatives at the Indo-German Investment Summit in Berlin this week, put forward a dramatic, ambitious program for new cities, jobs, and thorough economic revitalization.
In Russia, the fightback against the monetarists, such as the head of the Central Bank—a fight led by Sergei Glazyev—has now resulted in a public call, on Moscow radio, for the Duma to pass "something analogous to the Glass-Steagall law," in order to stop the speculative attack on the country.
Of course, problem areas remain; the Middle East is one crucial one. But the global shifts open up the potential for solving these as well. In the face of Obama's weakness, forces in the United States, typified by Rep. Walter Jones and Senator Tim Kaine, are stepping up the fight to stop global terrorism by getting the release of the 28 pages, and blocking the President's assertion of dictatorial powers to declare war.
The central reality is that the world has changed. New potentials have opened up, and they can be realized now.