More Banks Added To Collusion Case

The Competition Tribunal says more banks have been added in its investigation into forex price fixing.
A view of offices of US investment bank Bank of America Merrill Lynch in London on May 5, 2017.
A view of offices of US investment bank Bank of America Merrill Lynch in London on May 5, 2017.
JUSTIN TALLIS via Getty Images

More banks have been included in the Competition Commission's investigation into the forex trading collusion case, Fin24 reported. The case was referred to the Competition Tribunal at the end of last year.

This is according to a supplementary affidavit filed by the tribunal made available on Friday.

The investigation into allegations that many banks were involved in fixing forex bids in September 2007 started in 2015. Initially, 17 banks were investigated.

According to Business Tech, the allegations were that banks had been buying and selling US dollars in exchange for the rand at fixed prices, by making false sales to drive up demand or colluding to agree not to trade for periods of time. The commission said this was done "casually" over internet chat platforms.

Fin24 reported that, among the names now added to the investigation are Investec Bank, HSBC USA, Merill Lynch, and other American banks.

The affidavit filed by the tribunal reportedly records conversations had on a Bloomberg chatroom platform discussing arrangements for price and bid fixing.

So far, 14 banks have filed applications to make "exceptions", or contestations. The hearings for these contestations were scheduled for January 24-26 but were postponed, according to Fin24.

Last year, a bid by Standard Bank to gain access to the record of the commission's evidence against it was denied, according to Business Report.

The Tribunal ruled that Standard Bank had waited too long to ask for the record and said it was not entitled to the records. Absa and three other banks reportedly admitted guilt. US-based Citibank was reportedly fined R70-million after admitting guilt.

According to The Citizen, Absa was spared a fine when it applied for corporate leniency as a "whistle-blower" and admitted guilt.

The commission wants a penalty of 10% of their annual turnover imposed on the other banks. The commission reportedly said it was working with international agencies, too.

An analyst, Kokkie Kooyman, portfolio manager at Denker Capital, told the Mail & Guardian that the fines imposed on the banks would be enough to wipe out South Africa's budget deficit.

In Standard Bank's case alone, the fine could be as much as R9.1-billion. The budget reportedly stood at R140-billion in 2016.

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