WASHINGTON The Office of the Comptroller of the Currency said Wednesday that Citigroup, Bank of America and JPMorgan Chase would pay a combined $950 million to settle accusations they manipulated foreign exchange trading.
The penalties come as other regulators, including the Commodity Futures Trading Commission and the U.K.'s Financial Conduct Authority are also taking actions against several banks, including Citi, JPMorgan, and HSBC, over the same issue.
All told, the banks face more than $4 billion in penalties issued by U.S. and foreign regulators.
Under the OCC's order, Citi, JPMorgan and BofA were ordered to cease and desist improperly operating their foreign exchange trading businesses. Bank of America agreed to pay $250 million, while Citibank and JPM will pay $350 million each.
"We expect national banks and federal savings associations to have controls in place that are sufficiently robust to ensure that employees will follow the law and adhere to the highest standards of conduct," said Comptroller of the Currency Thomas Curry in a press release. "The enforcement actions we are issuing today make clear that the OCC will take forceful action, not only when the institutions we supervise engage in wrongdoing, but when management fails to exercise the oversight necessary to ensure that employees follow laws and regulations intended to protect customers and maintain the integrity of markets."
The OCC said exams between 2008 and 2013 found that some of the banks' traders used online chat rooms to coordinate foreign exchange trades in an effort to manipulate the exchange rates to benefit traders of the bank. It also found that the traders were disclosing confidential information of the bank, among other allegations.
Curry said the issues at the banks largely stemmed from bad culture - a topic bank regulators have repeatedly raised in recent months as a top concern.
"These enforcement actions were taken because several large banks permitted an environment to develop in which unscrupulous traders discussed manipulating foreign exchange markets," Curry said. "Our action today, and those of our fellow regulatory agencies here in the United States, in the United Kingdom and in Europe, sends a very strong signal that such misconduct will not be tolerated."