Global Financial Regulators Issue Record-Breaking Fines for Foreign Exchange Benchmark Rate Manipulation

    November 2014

    On November 12, 2014, the Commodity Futures Trading Commission, the Office of the Comptroller of the Currency, the UK’s Financial Conduct Authority, and Switzerland’s Financial Market Supervisory Authority collectively issued US$4.3 billion in fines and penalties against six financial services firms for “attempted manipulation of, and for aiding and abetting other banks’ attempts to manipulate global foreign exchange (FX) benchmark rates to benefit the positions of certain traders.” These newest fines bring total penalties for benchmark manipulation to more than US$10 billion over a two-year period. Additionally, regulators are requiring these firms to undertake remedial measures to prevent similar incidents from occurring in the future.

    This publication provides an overview of the firms’ alleged conduct with regard to FX benchmark rates, discusses the legal significance and repercussions of such action, and provides a brief overview on continuing developments in the FX marketplace.