South African anti-trust 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’s Merrill Lynch unit, 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 the Competition Tribunal, another anti-trust body, asking it to declare that the banks had contravened the Competition Act and that they were liable to pay administrative penalties.
“The Commission found that the respondents manipulated the price of bids and offers through agreements to refrain from trading and creating fictitious bids and offers at particular times,” it 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.”
Officials from BNP, JPMorgan, Germany’s Commerzbank AG, Barclays Africa Group Ltd., HSBC Bank Plc weren’t immediately able to comment when contacted by Bloomberg. Investec Plc, Standard Bank Group Ltd., Bank of America Merrill Lynch and South Africa’s central bank didn’t immediately respond to requests for comment. Standard Chartered Plc said it would not be suitable to comment at this stage.
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.
The tribunal will now notify the banks of the complaint against them and ask them to respond, Chantelle Benjamin, a spokesman for the body, said by phone. The banks will then file affidavits and attend a preliminary meeting to set a date for a full hearing, she said.