BRUSSELS-- J.P. Morgan Chase & Co. was fined a total of more
than EUR72 million ($92 million) by European Union regulators
Tuesday for rigging a benchmark interest rate and operating a
separate cartel for Swiss franc derivatives, marking the latest
phase in an EU crackdown on alleged market abuse by financial
institutions.
The European Commission, the bloc's central antitrust regulator,
said J.P. Morgan and Royal Bank of Scotland Group PLC had colluded
between March 2008 and July 2009 in an attempt to rig the Swiss
Franc London interbank offered rate, a benchmark interest rate.
In a separate decision, the commission said J.P. Morgan, RBS and
two Swiss banks-- Credit Suisse Group AG and UBS AG--had operated a
cartel for Swiss franc interest rate derivatives between May and
September 2007. UBS was fined EUR12.7 million for participating in
the cartel, while Credit Suisse will pay EUR9.2 million.
All banks recognized their involvement in the cartels, in
exchange for a 10% reduction in their respective fines, the EU's
antitrust chief Joaquín Almunia said in a statement.
"Cartels in the financial sector, whatever form they take, will
not be tolerated," Mr. Almunia said.
RBS avoided fines of around EUR115 million because it revealed
the existence of the cartels.
A spokeswoman for J.P. Morgan said the settlement "makes no
finding" that the bank's management or employees knew about or were
involved in the cartels, "or that the trader's actions had any
impact on the firms' Swiss Franc Libor submissions or the published
Swiss Franc Libor rates."
A spokesman for Credit Suisse said the bank had decided to
settle the case "to avoid lengthy legal proceedings." RBS and UBS
declined to comment.
Regulators on both sides of the Atlantic have levied some EUR6
billion in fines against financial institutions in connection with
probes into manipulation of widely used financial benchmarks such
as Libor and Euribor.
Tuesday's fines pales in comparison with the record EUR1.71
billion penalty against six financial companies handed down by the
EU in December, for operating cartels to rig the yen Libor and the
euro interbank offered rate, or Euribor. That ruling also targeted
RBS and J.P. Morgan, as well as Deutsche Bank AG, Société Générale
SA, Citigroup Inc. and RP Martin Holdings Ltd, a small London cash
broker.
The scale of the fines reflects "the value of sales of the
relevant products and the duration of the infringements," Mr.
Almunia said.
Further fines are possible. Last year the commission charged 13
of the world's largest investment banks with colluding in the $18
trillion market for credit derivatives. The bloc is also
investigating possible manipulation of foreign exchange
markets.
Write to Tom Fairless at tom.fairless@wsj.com
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