What is RBS announcing today?
RBS has agreed to enter a guilty plea and pay a fine of $395 million (£261m) to the US Department of Justice (DoJ), and enter into a cease and desist order and pay a fine of $274 million (£176m) to the Board of Governors of the Federal Reserve System (Fed), to resolve investigations into misconduct in the FX market. In addition, RBS has reached agreement to settle RBS’s exposure in the consolidated antitrust class action brought on behalf of US based claimants who transacted in the FX spot market. The settlement remains subject to court approval.
Today’s announcements follow the settlements reached last year which were £217m with the FCA and $290m (£192m) with the CFTC.
What has RBS pleaded guilty to in the DoJ settlement?
RBS has agreed to enter a guilty plea pursuant to a plea agreement entered into with the DoJ admitting that it knowingly, through one of its euro/dollar currency traders, joined and participated in a conspiracy to eliminate competition in the purchase and sale of the U.S. dollar and euro currency pair exchanged in the foreign currency exchange spot market in the United States and elsewhere, in violation of the Sherman Antitrust Act. The charged conspiracy continued from as early as December 2007 to at least January 2013. RBS is charged with participating in the conspiracy from as early as January 2007 until at least April 2010. The plea agreement is subject to court approval.
Where can I find out more information?
The DoJ Plea Agreement will be available on its website: www.justice.gov. The Fed Cease and Desist Order will be available on its website: www.federalreserve.gov.
If you have any further queries, please contact the bank through the usual channels. Visit your local branch, call us, or speak to your Business or Private Manager.
What is RBS doing as a result of these findings?
The bank’s senior management has implemented a stronger governance and control framework in Corporate & Institutional Banking. In 2013 a formal management committee, the Currencies Conduct and Remediation Committee was established with instruction to deliver customer and remediation improvements specifically within the Foreign Exchange business. Reforms to date include further restrictions on messaging and chat rooms, banning mobile phones on trading floors, enhancing client disclosure around fix orders and improving integrity and behaviour through strengthened surveillance and training. These reforms are in addition to a wider programme of cultural and remediation initiatives in Corporate & Institutional Banking that have been overseen by the Customer Standards Steering Committee (CSSC).
How is RBS dealing with accountability?
RBS continues to undertake a thorough review of the conduct of current and former employees in its FX business within its Corporate & Institutional Banking division. The investigation has so far resulted in the dismissal of three employees with a further two suspended pending further investigation. When taking accountability decisions, RBS is also continuing to review the actions and responsibilities of the managers of the FX business and the Corporate & Institutional Banking division during the relevant period.
Today’s announcements will be taken into account in the on-going accountability and disciplinary process. In addition, the Group Performance and Remuneration Committee and senior management will take today’s announcements into consideration in relation to future remuneration decisions.