Bigger than Libor? Forex probe hangs over banks - Nov. 20, 2013 - 0 views
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Yet another dark cloud is looming over global banks as officials examine their behavior in the massive foreign exchange market, threatening to deal a new blow to earnings and reputations. Regulators in the U.S., Europe and Asia are in the early stages of investigating whether traders at the world's top banks manipulated foreign exchange benchmarks to profit at the expense of their clients. Goldman Sachs (GS, Fortune 500), Citigroup (C, Fortune 500), JP Morgan (JPM, Fortune 500), Deutsche Bank (DB), Barclays (BCS), Royal Bank of Scotland (RBS), UBS (UBS) and HSBC (HBCYF)are among the firms in their sights. Financial lawyers say the probe could have steep and uncertain consequences as the impact of currency market abuse would reverberate far beyond Wall Street.
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It's unwelcome timing for an industry already fighting a raft of legal battles over foreclosure abuses, misleading investors over mortgages and payment protection insurance. And then there's the Libor scandal. A global investigation into the setting of the London interbank lending rate, and related global benchmarks, has so far yielded about $3.6 billion in fines. Penalties for some of the biggest players are still to come. Traders have also faced criminal charges. As the extent of damage caused by Libor-rigging is revealed, lawyers say the probe into fixing currency rates could unfold in a similar way, and rival its impact. London is the center of the loosely regulated foreign exchange market, the biggest in the world's financial system with average daily turnover of $5.3 trillion. Proven abuse in this market would have a significant ripple effect, exposing offending firms to a host of legal action.
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For more detail see http://money.cnn.com/2013/10/30/news/companies/global-forex-probe/ I'll get excited if and when major bankster executives face prison time. Until then, the "fines" against corporations are just a cost of doing business usually dwarfed by the unjust riches that one group of human beings fraudulently acquires from others. Reality check: corporations are an entirely imaginary legal fiction; it's actually people that are committing the misbehavior. Fines for corporations are as fictional as the corporations themselves; you must prosecute the people and send them to prison to deter bankster misbehavior. And it is human beings working for another legal fiction, government, who are making the decisions to prosecute corporations rather than misbehaving people.