JPMorgan, HSBC, Credit Agricole To Be Fined For Rate Rigging

Business malpractices continue to be a cause of concern for banks. As per persons familiar with the matter, the European Union (EU) antitrust officials are giving final touches to the fines to be imposed on JPMorgan Chase & Co. (NYSE:JPM) , HSBC Holdings (LON:HSBA) plc (NYSE:HSBC) and Credit Agricole (PA:CAGR) S.A. for alleged manipulation of Euro Interbank Offered Rate (EURIBOR).

The penalties are expected to be announced as early as next month. Subsequently, this would end the five-year probe by the EU into the matter.

These three banks were not part of the multi-bank settlement deal that was announced by the EU in Dec 2013. An aggregate penalty of around £825 million ($888 million) was imposed on four banks – Barclays (LON:BARC) PLC (NYSE:BCS) , Société Générale (PA:SOGN), Deutsche Bank AG (NYSE:DB) and The Royal Bank of Scotland (LON:RBS) Group plc (TO:RBS) – over similar allegations.

Banks were accused of colluding to rig the key interest rate benchmark with an aim to influence the prices of several global financial instruments. The commission accused HSBC, JPMorgan and Credit Agricole of breaching the EU antitrust rules.

In May 2014, charges were levied against these three banks, while they continued to deny any wrongdoing. Hence, there were delays in penalizing these banks. Notably, by rejecting to settle the probe, banks forfeited the chance of 10% discount on fines to be imposed.

Nonetheless, the EU can enforce a fine of up to 10% of a bank’s global turnover for violating rules.

Nearly $9 billion fines (in total) have been imposed on several global banks by regulators across the globe for alleged rigging of London interbank offered rate (LIBOR) and many such benchmarks over the last four years.

Among the banks mentioned above, JPMorgan, HSBC, Barclays, Deutsche Bank and Royal Bank of Scotland carry a Zacks Rank #3 (Hold).

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