EU Eyes JPMorgan, HSBC for Futures Manipulation
(CN) - JPMorgan Chase, HSBC and Credit Agricole likely colluded to manipulate prices on the EU futures market, the European Commission said Tuesday.
Regulators discovered the possible violation of EU antitrust rules as part of a massive ongoing probe into banking-industry practices after the worldwide economic collapse. The commission carried out unannounced inspections of several banks in 2011 to determine whether they had colluded to fix the European Interbank Offered Rate (Euribor) benchmark interest rate.
Eight international banks were eventually dealt fines totaling $2.34 billion. The agency said in a statement Tuesday that JPMorgan Chase, London-based HSBC and France's Credit Agricole also operated a cartel that "distorted the normal course of pricing components for euro interest rate derivatives."
The banks get the opportunity to defend themselves, with the commission providing full access to its investigation files. A finding of infringement could result in fines of up to 10 percent of the banks' worldwide annual revenues.
Regulators also noted that, while several of the banks fined in the first go-round had settled with the commission, this investigation is proceeding under nonsettlement cartel procedures.
Earlier this year, EU lawmakers advanced a bill by the commission to criminalize market abuse and insider trading - a result of the ongoing EURIBOR-LIBOR scandal investigations. Regulators said banks ran roughshod over the EU's current patchwork of 28 different member-state laws and took advantage of the lack of effective sanctioning powers prior to the 2008 worldwide fiscal collapse.
In the United States last year, the Royal Bank of Scotland and its Japanese subsidiary paid $150 million to settle criminal charges for their roles in the LIBOR manipulation scheme. Barclays admitted to similar allegations in 2012.
The Justice Department has so far generated about $612 million in criminal penalties related to the LIBOR fiasco.