Make Kitco Your Homepage

UPDATE 1-U.S. Federal Reserves fines BNP Paribas $246 mln for foreign exchange fixing

Kitco News

(Recasts, updates to include statement from BNP Paribas)

By Pete Schroeder

WASHINGTON, July 17 (Reuters) - The Federal Reserve announced on Monday it had fined BNP Paribas $246 million for "unsafe and unsound" practices in its foreign exchange markets, saying it had found deficiencies in the bank's oversight and internal controls of its traders.

The Fed said the bank had failed to detect and address the use of electronic chatrooms used by those traders to talk with competitors about trading positions.

The fine marks the latest action taken by the U.S. central bank as part of a long-running crackdown on price-fixing across foreign exchange markets, in which several banks have already pleaded guilty to conspiring to manipulate currency prices.

In a statement, BNP Paribas said it "deeply regrets the past misconduct which was a clear breach of the high standards on which the group operates."

In January, the Fed permanently barred one of the bank's former traders, Jason Katz, from participating in the industry in the future over manipulation of FX prices. The Fed also is barring the bank from re-hiring any of the people involved in the activity that led to the fines.

Katz, who also spent time at Barclays, pleaded guilty to participating in a price-fixing conspiracy in January. In addition to the fine, the Fed ordered BNP Paribas to overhaul how its senior management conducts oversight, and heighten controls on its foreign exchange trading.

(Reporting by Pete Schroeder; editing by Diane Craft)

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Precious Metal Charts

Follow Kitco News