Global regulators have hit five banks with fines of nearly £2bn for massive failings in foreign exchange trading.
The FCA has handed out its largest ever fines totalling £1.1bn with Citibank fined £226m, HSBC fined £216m, JP Morgan fined £222m, Royal Bank of Scotland fined £217m and UBS fined £234m.
The US authorities have also issued fines worth around £880m to the banks while the Swiss regulator has fined banks £87m.
The FCA is also continuing to pursue a case against Barclays for foreign exchange failings.
Between 1 January 2008 and 15 October 2013, the FCA says traders tried to manipulate foreign exchange rates through collusion with other banks.
The regulator says the banks failed to manage obvious risks around confidentiality, conflicts of interest and trading conduct.
It says the failings allowed traders at those banks to behave unacceptably. They shared information about clients’ activities which they had been trusted to keep confidential.
Banks also attempted to manipulate G10 spot FX currency rates, including in collusion with traders at other firms, in a way that could disadvantage those clients and the market.
The G10 currencies are the US dollar, Euro, Japanese yen, British pound, Swiss franc, Australian dollar, New Zealand dollar, Canadian dollar, Norwegian krone and Swedish krona.
The FCA says traders at different banks formed tight knit groups in which information was shared about client activity, including using code names to identify clients without naming them.
These groups were described themselves as “the players”, “the three musketeers”, “one team, one dream”, “a co-operative” and “the A-team”.
The Serious Fraud Office is also launching criminal investigations into individuals in involved in the attempted manipulation of rates.
It is the first time the FCA has worked collectively with international agencies and pursued a settlement with a group of banks.
In addition to the fines, the FCA is launching an industry-wide review of foreign exchange to address root causes including a series of attestations from senior managers that changes have been made.
FCA chief executive Martin Wheatley says: “The FCA does not tolerate conduct which imperils market integrity or the wider UK financial system. Today’s record fines mark the gravity of the failings we found and firms need to take responsibility for putting it right.
“They must make sure their traders do not game the system to boost profits or leave the ethics of their conduct to compliance to worry about. Senior management commitments to change need to become a reality in every area of their business.
“But this is not just about enforcement action. It is about a combination of actions aimed at driving up market standards across the industry. All firms need to work with us to deliver real and lasting change to the culture of the trading floor. This is essential to restoring the public’s trust in financial services and London maintaining its position as a strong and competitive financial centre.”