Rigging Financial Markets: Barclays Massive Allegations
Barclays is one of the banks facing massive allegations of rigging the financial markets just like the Royal Bank of Scotland. The current allegations seem to transform into something huge the bank would have wanted to forget very soon after being fined £1.5 billion due to fraudulent traders found rigging foreign currency rates through its system. This is expected to take another turn after regulators in the United States showed their concerns since they believe the abuse was not the result of a couple of corrupt people within the bank’s staff, but something obviously systematic.
Barclays is not the only global lender under investigation considering a number of other institutions are also in the same murky waters; they were found to have tweaked computer programmes within their platforms for foreign exchange trading with a view to rig the markets.
Since 2014, a probe into Germany’s Deutsche Bank and Barclays has been in progress through monitors installed to gather as much evidence as possible by the NYDFS (New York Department of Financial Services). The investigation seems to have gathered a lot of momentum to a point where a collection of top giant global banks such as Societe Generale, Credit Suisse, BNP Paribas and Goldman Sachs have also found themselves under investigation.
It’s supposed the allegations will definitely beg more grave questions on the entire banking sector if the giant institutions would be found to have rigged foreign currency rates. A number of staff members at Barclays are already giving evidence to the watchdog from New York with the investigations believed to have entered a very critical stage.
NYDFS has already fined Barclays £260 million, which was incorporated into the £1.5 billion settlement with both United States and UK regulators concerning the scandal surrounding foreign exchange.
However, Barclays is bracing itself for another painful penalty concerning the freshly raised allegations, although the bank had already set aside about £2 billion for the payment of fines related to the Forex scandal; about £500 million still remain.
Experts have indicated that if the computer systems of banks were set up in a manner that they would manipulate the Forex rates it could implicate a lot of people in virtually all the giant global lenders mentioned. The current scandal would worsen and beg very pertinent questions on the level and quality of oversight provided by external auditors, IT managers and executives, casting doubts on basically everyone and everything. Experts think that things are very wrong if there are professionals in reputable financial organisations who believe setting a system to cheat markets and customers is normal.
Barclays has said it has nothing to hide and will keep on co-operating with the bodies involved in theinvestigations. At the same time, a good number of banks are also bracing themselves for massive class action kinds of lawsuits that might be triggered by the criminal liability admissions and fines.
Other lawsuits are clearly expected after the ruling by the market manipulation probe by the European Commission. The amounts these global lenders are expected to part with as payout is also expected to go up after the ruling.
Currently, about 20 financial institutions among the top global banks have already paid out compensations and fines worth £150 billion in just seven years.