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South African Regulators Charges Two Further Banks For FX Rigging

South Africa’s Competition Tribunal has added further charges against two of the 18 banks that have been accused of rigging foreign exchange rates for several years.

The Tribunal filed an affidavit earlier this week that it has additional allegations against Standard New York, a subsidiary of Standard Bank and the Bank of America.

The new allegations were made public after the Competition Commission said that the affidavit should have been released after the deadline for submitting supplementary affidavits lapsed March-end.

Signed on March 31, the affidavit states that commission inspector Mfundo Ngobese had become aware of additional misconduct by the banks over and above the initial complaints filed against the banks by the commission.

According to the affidavit, Standard New York was involved in coordinating trading activity on the Reuters platform with the intention of fixing the prices for generating profit. Standard Bank did not have any comments on the fresh charges.

In the original case, 11 banks including major banks such as Citibank and Barclays were accused of colluding on trades enabling them to influence currency rates. The timing of such transactions helps traders to move the prices of the US Dollar/Rand currency pair up or down helping them to generate large profits.

CGTN Africa

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Ngobese reiterated in the affidavit that the Competition Tribunal had jurisdiction over the rigging issue which was also a response to doubts raised by some banks like JPMorgan Chase and HSBC. According to Ngobese, the Tribunal had the power in this matter because the country’s Competition Act was applicable to all forms of economic activity occurring within South Africa, and also when such activity had an impact on South Africa.

The only exceptions were in cases of agreements signed with respect to collective bargaining as defined by the Constitution or the Labour Relations Act. One of the banks charged, Citibank has agreed to pay a penalty of R69‚500‚860 as a part of a settlement with the government. The global banking major accepted that it had entered into prohibited practices between 2007 and 2013 with respect to spot trading transactions involving the rand.

Citibank has also agreed to cooperate with the authorities in further investigations. A hearing was recently convened before the Competition Tribunal to confirm the settlement. Makgale Mohlala, head of the cartels division said that other banks had raised a request during the hearing to file an exception regarding the jurisdiction. If the exceptions are filed, then hearing in May or June will be scheduled to settle the issue.


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