The U.S. Federal Reserve Board is sanctioning France-based banking giant BNP Paribas SA for misconduct in the foreign exchange (FX) market.
The Fed announced on Monday that it will levy a US$246-million fine against BNP Paribas and its U.S. subsidiaries for “unsafe and unsound practices” in the FX markets. Specifically, the Fed said that it found deficiencies in the bank’s oversight and internal controls over FX traders.
“The firm failed to detect and address that its traders used electronic chat rooms to communicate with competitors about their trading positions,” it says.
In addition to the fine, the Fed’s order requires the bank to improve its senior management oversight and controls.
Earlier this year, the Fed permanently prohibited a former BNP Paribas trader, Jason Katz, from the banking industry for his manipulation of FX prices. It is also prohibiting the firm from re-employing individuals who were involved in the underlying misconduct.