The US Department of Justice has told banks they have a month to admit to and agree penalties over alleged rigging of the £3 trillion-a-day foreign-exchange market.
The news comes days after six banks agreed fines and penalties totalling £2.6 billion with four regulators, including London’s Financial Conduct Authority.
US Attorney General Eric Holder said that the DoJ would finish its forex investigation “relatively soon” and was looking at both civil and criminal proceedings.
The DoJ is working with the Serious Fraud Office in the UK and officials from the US Federal Reserve.
Chancellor George Osborne wrote to the head of the SFO today pledging unlimited financial backing to the police in bringing prosecutions against traders who boasted of “making free money” in the forex market.
Osborne wrote: “I understand that the SFO is in the early stages of a major investigation into forex trading. Given the importance of this work, the Treasury will provide the required funding for this investigation.”
He added: “We must continue to pursue criminal wrongdoing at the highest level. I have always made sure that the SFO has the funds it requires for its investigations.”
The DoJ has contacted the banks involved outlining the penalties each of them faces. But it did not manage to reach agreement in time to go ahead with the FCA, the US Commodity Futures Trading Commission, Office of Comptroller and Swiss regulator’s settlement on Wednesday.
Banks — including Barclays, which opted not to join the overall settlement, and Royal Bank of Scotland and HSBC, which did — are still facing investigations by the New York Financial Services’ Superintendent Ben Lawksy and the US Securities and Exchange Commission.
The DoJ is aiming to make several banks plead guilty to charges of rigging the forex market.
So far, in cases like Libor, sanctions busting and money laundering it has successfully wrung guilty pleas from UK and European banks but not one from a US bank.Reuse content