Citigroup and jpmorgan confirm forex investigations

Since then, the commission has been building a new computer system to track unpaid fines. The amount includes monetary penalties and disgorgement, a type of fine that seeks to recover illegal profits. The SEC partly measures its success as an enforcement agency by how much it levies in fines and how much it collects.

It also sometimes takes credit for fines that will likely never be collected. In the Petrobras settlement, the SEC allowed the company to avoid paying most of that amount if it handed over an equivalent sum to Brazilian authorities, who pursued a separate investigation, and to U. In other cases, the SEC is still chasing the money—years after it levied a fine. Montford has paid the SEC in monthly amounts from his Social Security income, he said in an interview. Montford, who owns a home in Highlands, N.

Montford, 71 years old. The agency says that approach is justified because fines deter misconduct, and defendants who claim they are broke may one day come into money again. In this case, they would want to buy a lot of euros in the few minutes right before the fix in order to increase the price.

To do that, they try to anticipate the actions of banks outside of these chat rooms, and take one of the following options: [16] Try to net off with outside banks buy from them at the fix so that the chat room traders have fewer euros to buy, but outside banks have fewer to sell to their customers.

Try to sell to outside banks at the fix, so the chat room traders have more euros to buy in the last few seconds of the fix, but outside banks have more to sell. Transfer their orders to a single trader within the chat room, thereby increasing his influence in the market, and this trader then executes a single order during the fix period. Of course, options 1 and 3 seem to be the complete opposite of each other, and it is counter intuitive they would have the same effect in favor of the positions of the traders within the private chat rooms.

Regardless, by knowing in advance what other banks are doing and colluding with each other, these traders did get an unfair advantage allowing them to push the price around more than a pure market supply and demand system would allow. Utilitarianism is an ethical theory that proposes an act is morally right if and only if that act maximizes the good for all.

It is important to note the theory involves many distinct claims regarding the moral rightness of any action. Utilitarianism argues the morality of any action only depends on the consequences, rather than the intentions, of the action. Furthermore, the value of these consequences are evaluated based on the pleasures and pains they cause, and the moral rightness depends on the total net good in the consequences to all people.

Case Study: JPMorgan JPMorgan is among the four banks that pleaded guilty to the charges of rigging the fix rates of the foreign exchange market to reap a profit. Instead, the FCA gives detailed examples of how traders at JPMorgan attempted to manipulate the exchange rates for their own financial profit.

The following case, interpreted from the chat room histories revealed by investigators, demonstrates an attempt by a senior trader to manipulate the p. In a chatroom conversation, it offers to transfer this order to Firm A. The FCA said these trades were designed to take advantage of the expected upwards movement in the fix rate following the discussions within the chatroom.

Between them they accounted for 41 per cent of the euro-dollar trade. For these financial giants, however, this is a rather small sum to be added to the overall earnings of a behemoth bank. More importantly, these profits made by traders over the years of manipulation do not go directly to their salaries.

The main motivation for these traders to manipulate the rates was actually to boost end-of-year bonuses awarded for being a part of a team that consistently made higher profits. JPMorgan and Citibank were fined the heaviest, proportional to the extent of their involvement in the manipulations.

The consequences of the forex rate manipulation on other people are slightly more complex. Firstly, these banks were able to drive the exchange rate for two currencies down or up to make a profit, but the price movements from the manipulation are so small holidaymakers are unlikely to notice a big difference when buying foreign currency.

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