A South African antitrust regulator said it found that more than a dozen international and local banks colluded to manipulate foreign currency trades and recommended they be fined 10 percent of their annual turnover.
The Competition Commission identified lenders including Bank of America Merrill Lynch, JPMorgan Chase & Co., BNP Paribas SA, Credit Suisse Group AG, HSBC Holdings Plc and Nomura Holdings Inc. as having participated in price fixing and market allocation in the trading of foreign currency pairs involving the rand since at least 2007. It referred the case to an antitrust tribunal, concluding an investigation that began almost two years ago.
“The respondents manipulated the price of bids and offers through agreements to refrain from trading and creating fictitious bids and offers at particular times,” the commission said in an e-mailed statement Wednesday. “They assisted each other to reach the desired prices by coordinating trading times. They also created fictitious bids and offers, distorting demand and supply in order to achieve their profit motives.”
South Africa’s efforts to better regulate foreign-exchange trading follows a price-rigging scandal in which some of the world’s largest banks agreed to pay fines and plead guilty to conspiring to manipulate markets after being accused of using online chat rooms to collude. The country’s antitrust regulator announced in 2015 that it was investigating banks.
‘Serious Matter’
Bank of America, JPMorgan, Standard Chartered Plc, Commerzbank AG and BNP declined to comment when contacted by Bloomberg. Officials from HSBC Bank Plcweren’t immediately able to comment, while Investec Plc didn’t immediately respond to requests for comment.
Investec said it would cooperate with authorities but was unable to comment further because it didn’t have details of their investigations. Barclays Africa Group Ltd. also said it would cooperate with the authorities, while noting that the regulator had not sought penalties against it. Credit Suisse said it looking into the matter.
South Africa’s central bank said it viewed the allegations as serious matter and would allow proceedings to run their course. The tribunal will now notify the banks of the complaint and ask them to respond, Chantelle Benjamin, a spokesman for the body, said by phone. The banks will then file statements and attend a preliminary meeting to set a date for a full hearing, she said.
The commission has previously uncovered collusion in the country’s bread and flour industry, among cement producers and by construction companies that bid to build stadiums for the 2010 soccer World Cup. Those involved were forced to pay hefty fines.
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