Royal Bank of Scotland Suspends Two Employees in the Wake of the Ongoing Forex Probe
It has been a rough time for the six banks that were involved in the foreign exchange scandal. One of these six major international banks is Royal Bank of Scotland, which has suspended two more employees during the investigation in the forex scandal.
The shares of RBS dropped by 1% after the incident. Before this, the bank has already suspended three of its employees. These three officials were among the six senior staff members who were placed under a disciplinary process.
Recent suspensions have brought the total number to five. During the forex trading investigation, one of the bank officials said, “We are confirming that two staff members have been suspended as part of the ongoing forex investigation.” The employees’ identities were not revealed.
The internal investigation started in the foreign exchange trading department following the forex rigging scandal. It led to penalties worth millions of pounds imposed by the UK and the US regulators, to be paid by RBS and the other banks.
79% of RBS is owned by the Government and last month was fined a total of £2.6 billion for being inadequate to stop the traders rigging the foreign exchange markets. After this, the bank also launched an internal assessment program to review its forex activities.
RBS also stated in December that it was constantly reviewing the behaviour of over 50 traders, both current and former, who were believed to have been involved in the investment bank, which was the highlight of the investigations of the regulators. They were also investigated and bonuses of 18 of them were suspended. These 50 traders were senior managers as well as supervisors.
The Chief Executive of RBS, Ross McEwan had alleged that, “I am extremely angry as well as disappointed at this point. This bank had people who did not know the difference between right and wrong.”
RBS has paid £217m in Britain and £290m in the US as forex penalties. The authorities had specified that to enhance their profits, the traders had leaked confidential details of clients and their orders as well as coordinated trades.
According to Jon Pain, the present RBS head of conduct and regulatory affairs, who is also the investigation chief, “A strict and thorough review is being undertaken into the actions of the traders that caused this wrongdoing and the management that did not pay attention. As complicated a process it is, it is also an essential one in order to identify culpability and accountability for this unacceptable misconduct.”
According to The Times, the Financial Conduct Authority (FCA) has decided to maintain a strict supervision on the traders involved in foreign exchange, after learning about the scandal by the US Department of Justice. It also mentioned that the recent cases could not be a part of the internal investigation of FCA. These were related to the rigging of the evolving market currencies.
Probing over foreign exchange trading is still ongoing with the banks by financial regulators of New York, DoJ and Federal Reserve.