Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

$5.6B for 5 banks to settle up on manipulating forex for customer’s accounts

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Big settlement announced today to resolve the Forex manipulation cases. Big surprise for me is the NYDFS only came in at $485M, with all of that going against Barclays. I was guessing a higher amount with DFS wanting a settlement from all the banks.

Here are two articles with the details, then I’ll list the individual settlements: 

Wall Street Journal – Global Banks to Pay $5.6 Billion in Penalties in FX, Libor Probe / Citi, J.P. Morgan, Barclays, RBS to Plead Guilty to Conspiring to Manipulate FX Prices

NY Department of Financial Services – NYDFS Announces Barlcays to Pay $2.4 Billion, Terminate Employees for Conspiring to Manipulate Spot FX Trading Market. The settlement agreement is here.

Eight employees will be fired.

No other individual accountability.

All the banks except UBS copped to one felony charge. They will each have a three-year probation.

The manipulation of forex ran from about December 2007 through about January 2013.

Here are the settlements by bank:

Barclays

  • One guilty plea to criminal antitrust violation
  • $650M – DoJ
  • $485M – NYDFS
  • $400M – CFTC
  • $342M FRB
  • $441M – UK Finanail Conduct Authority (UK FCA)
  • $  60M – additional penalty for violating DPA from manipulating libor
  • $2.38B – total to DoJ, FRB, CFTC, NYDFS UKFCA (eh…an immaterial $2M rounding difference in the total)

JP Morgan

  • One guilty plea to criminal antitrust violation
  • $550M – DoJ
  • $342M – FRB

RBS

  • One guilty plea to criminal antitrust violation
  • $395M – DoJ

Citigroup

  • One guilty plea to criminal antitrust violation
  • $925M – DoJ
  • $342M – FRB

Bank of America

  • $205M – Federal Reserve

UBS announced earlier today: (update in italics)

  • $545M $203M– forex -DoJ
  • $342M – FRB 

That is a total of $5,684M drained out of the TBTF bank’s capital accounts with this round of settlements. Five and a half billion dollars wasted.

Running totals of settlement by fiasco

I’ve been scoring at home for the Libor and Forex settlements. Yes, yes, I know I am weird. But maintaining a large spreadsheet is the only way to keep all the banks and all the scandals and all the amounts straight.

Forex

My estimate was way high, since I was thinking the DFS would take a chunk out of the hides of all the banks. My previous estimate was $19.7B.

Current estimate is total of $14.3B, with $11.0B actual to date and an estimate of another $3.3B out there, primarily for Duetsch Bank.

Libor

My previous estimate was $8.7B. Actual to date is $8.9B. I don’t know whether any other banks are in settlement talks.

Written by Jim Ulvog

May 20, 2015, 13:44 pm at 1:44 pm

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