Five banks are taking back traders’ bonuses because of the Forex rigging scandal

Five of Britain's biggest banks are preparing to take back millions of dollars worth of traders' bonuses, in an attempt to make reparations for their involvement in the Forex rigging scandal.

 

According to the FT, the banks going ahead with the clawbacks are UBS, RBS, Citigroup, HSBC and JPMorgan Chase & Co.

 

Earlier this week, the Financial Conduct Authority (FCA) revealed that it was placing hefty fines on the five banks as a result of their “failure to control business practices" in their foreign exchange trading operations.

 

The fines followed a year of investigations by the UK's financial watchdog into allegations of rate-rigging in their spot forex trading businesses. Traders were accused of sharing confidential information with each other and colluding to manipulate fixed rates for their own benefit, often to the possible detriment of their clients. 

 

It is the first time clawbacks have taken place, since although the banks are allowed to take this step under European law, they chose to limit themselves to withholding unpaid bonuses in the wake of past scandals.

 

Dozens of traders are expected to be affected by the clawbacks according to sources involved in the matter, but they will be subject to internal review before they go ahead.

 

A UBS spokesman said: “Naturally, where we find acts of wrongdoing, our policy to claw back and not pay out will come into effect.” The other banks declined to comment. 

 

As a precaution, RBS has already suspended giving bonuses to 19 of its traders.