Citibank admits to Rand fixing, to pay USD5 million fine

citibank

As a follow up to the South African Rand fixing investigation, Citibank will be paying USD5 million for its role in rigging the currency.

Eleven other banks are amongst the list of banks accused of rigging the rand.

Using the real time conversion rate, Citibank will be paying ZAR69.5 million.

On a broader view the final fine is less than 10 percent of Citibank’s annual revenue in South Africa – the potential size of the penalty – because the bank is one of two co-operating with anti-trust authorities’ investigating arm, the Competition Commission.

The Commission, which investigates cases before referring them to the Tribunal for adjudication, said in February it had found more than a dozen local and foreign banks colluded to coordinate trading the rand and the U.S. dollar.
It recommended fines amounting to 10 percent of the banks’ South African revenues in a scandal that has piled political pressure on local banks.

The Tribunal said Citibank admitted to manipulating the price of bids and offers through agreements to refrain from trading, and created fictitious bids and offers.

“Citibank additionally admitted to fixing bids, offers and bid-offer spreads in relation to spot trades on ZAR (rand) currency pairs through co-ordination/alignment of the bids, offers, and bid-offer spreads quoted to customers,” it said in a statement.

Barclays Africa is also cooperating with investigators in exchange for immunity from prosecution. The Commission has granted the regional unit of Barclays PLC conditional immunity.

The Commission began its investigation in April 2015, joining an international probe into the manipulation of foreign exchange rates that has led to big banks paying more that $10 billion in settlements.

The following weeks will see more revelations as to how many of the accused banks will be penalised for their role in Rand fixing saga.