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Foreign Exchange Price Fixing Probe Sees First Individual Guilty Plea

Friday, January 06, 2017
Sandler, Travis & Rosenberg Trade Report

The Department of Justice announced Jan. 4 the first guilty plea from an individual in its ongoing investigation into antitrust and fraud crimes in the foreign exchange market. The foreign currency exchange dealer pleaded guilty to participating in a price-fixing conspiracy, including by manipulating prices on an electronic FX trading platform through the creation of non-bona fide trades, coordinating the placement of bids and offers on that platform, and agreeing on currency prices quoted to specific customers. According to a DOJ press release, this individual faces a maximum penalty of ten years in prison and a $1 million fine, which may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than the statutory maximum.  

The DOJ notes that in May 2015 four major banks pleaded guilty to participating in this conspiracy at the parent level and agreed to pay collectively more than $2.5 billion in criminal fines. A fifth bank pleaded guilty to manipulating benchmark interest rates and agreed to pay a $203 million criminal penalty after breaching a non-prosecution agreement.

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