Pressure is building on the banks accused of rigging the rand to come clean after British multinational lender, Standard Chartered Bank, took responsibility and admitted to its participation in the cartel, indicating its intention to cooperate with the investigators helping the Competition Commission to get to the bottom of the malpractice.
The commission, which covered the years between 2007 and 2013, alleged various banks had fixed prices of bids, offers and bid-offer spreads in relation to spot trades of the rand currency pairs through bilateral and multilateral communications using instant messaging
platforms and other means of communication.
In addition, the banks assisted each other through allowing a trader with a large open risk position to complete their trades first before trading, and through holding and/or pulling their trades to reverse liquidity for each other instead of trading normally on the market.
US banking giant, Citibank, a few years ago admitted to its involvement in spot trading of rand currency pairs between September 2007 and October 2013. It agreed to pay an administrative penalty to the amount of R69.5-million. It also agreed to fully cooperate in the prosecution of the matter.
This time around, Standard Chartered Bank will pay South African authorities R43-million and throw other banks under the bus, forcing them to do the same. The British bank is one of 28 banks accused by the commission of manipulating the US dollar and rand currencies.
On the bank’s willingness to settle, the commission said: “The commission welcomes Standard Chartered Bank’s decision to reach a settlement on this matter and encourages
other respondent banks to consider settling the complaint against them,” said the commissioner’s Doris Tshepe.
The banks in the dock include Standard Bank, FirstRand, Nedbank, Bank of America Merrill Lynch International, BNP Paribas and Investec.
The spotlight will also be on authorities on why they settled for a paltry R43-million, when a few years ago the British bank settled the same matter with US authorities for half a billion rands.