Tribunal confirms Citibank R70 million settlement for rand price-fixing
The Competition Tribunal has confirmed that Citibank has paid a settlement of R69.5 million after it was implicated as one of 17 banks responsible for price-fixing of the rand dating back to 2007.
In a statement on Wednesday, the Tribunal noted this amount did not exceed 10% of the the bank’s annual turnover (the highest potential penalty) as it had agreed to cooperate in the settlement and act as a witness against the other banks implicated.
Currently three South-African based banks have been implicated in the price-fixing scandal including Investec, Standard Bank and Absa who could now face the full punishment of a 10% penalty fine of their annual turnover.
This follows an almost two-year international investigation into the matter by the Competition Commission who in February 2017 handed over a list of 17 banking groups to the Competition Tribunal it suspected took part in widespread collusion relating to the the price-fixing of the rand.
Citibank admitted that between September 2007 and October 2013, it, and its competitors, manipulated the price of bids and offers through agreements to refrain from trading and creating fictitious bids and offers at particular times, assisted each other by allowing a trader with a large open risk position to complete his trades first before trading and through holding and/or pulling their trades to reserve liquidity for each other instead of trading normally in the market.
Citibank additionally admitted to fixing bids, offers and bid-offer spreads in relation to spot trades on ZAR currency pairs through co-ordination/alignment of the bids, offers, and bid-offer spreads quoted to customers.
The 17 banks implicated include:
- Bank of America Merrill Lynch International
- BNP Paribas
- JP Morgan Chase & Co
- JP Morgan Chase Bank
- Investec
- Standard New York Securities
- HSBC Bank
- Standard Chartered Bank
- Credit Suisse Group
- Standard Bank of South Africa
- Commerzbank AG
- Australia and New Zealand Banking Group
- Nomura International
- Macquarie Bank
- ABSA Bank Limited (ABSA)
- Barclays Capital
- Barclays Bank
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