BNP Paribas fined $350m for failing to oversee FX trading ‘cartel’

FX traders were found to have manipulated prices, shared confidential data and executed fake trades.

BNP Paribas has been fined $350 million for failing to manage its FX trading teams who were manipulating FX rates, executing fake trades and sharing confidential information.

The New York State Department of Financial Services (DFS) described the violations - which were carried out between 2007 and 2013 - as significant and long-term.

It found that a trader located in the New York branch masterminded several schemes to manipulate prices and spreads in several currencies.

A group chat with other traders - labelled the ‘cartel’ - made plans to manipulate the price of the South African rand during New York trading hours, when trading was less liquid, and increased the bank’s profits.

FX traders at BNP Paribas were also sharing confidential information with traders at other banks and adjusted prices based on the inside knowledge.

DFS Superintendent Maria Vullo said BNP Paribas paid little to no attention to the supervision of its FX trading business, allowing its traders to violate New York State laws for several years.

“Participants in the foreign exchange market rely on a transparent and fair market to ensure competitive prices for their trades for all participants,” she said.