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From Banking and Finance Law Daily, July 17, 2017

BNP Paribas agrees to $246 million settlement of FX-related charges

By Richard A. Roth, J.D.

BNP Paribas S.A. and two U.S. subsidiaries have agreed to pay more than $246 million to settle Federal Reserve Board charges that lax supervision allowed foreign exchange traders improperly to communicate with competitors about BNP’s trading activities. The order also requires the organization to improve its oversight and controls over FX trading. The Fed added that it has prohibited BNP from re-employing the individuals who were involved in the illegal communications. BNP did not admit any wrongdoing as part of the settlement.

The consent order says that BNP employees who were trading in the spot market routinely exchanged electronic messages with traders at other financial institutions. The messages included discussions about:

  • trading positions and coordinated trading strategies;
  • anticipated benchmark fix-related trading;
  • confidential information about BNP customers;
  • bid/offer spreads offered to BNP customers; and
  • trades that would trigger or defend barrier options inside BNP in order to benefit the bank.

The communications involved both U.S. dollars and foreign currencies and covered trades on behalf of both BNP customers and the bank. The consent order noted that BNP identified the illegal conduct, reported it to the Fed, and has cooperated with the Fed’s investigation. The bank already has begun to improve its practices on a group-wide basis.

Europe-based BNP Paribas is an international financial organization that does business in 75 countries.

Companies: BNP Paribas S.A.; BNP Paribas Securities Corp.; BNP Paribas USA, Inc.

MainStory: TopStory BankingOperations EnforcementActions FederalReserveSystem FinancialIntermediaries

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