Banks could pay $41 billion for rigging foreign-exchange markets according to Citigroup Inc. analysts. The international probes have shined the spotlight on the biggest and most respected names in the banking business. Leading the offenders is Deutsche Bank which is seen as most impacted with a possible fine of 5.1 billion euros ($6.8 billion) followed by Barclays which could face 3 billion pounds ($4.8 billion) in fines.
The fines are the result of investigations by international authorities concerning allegations that the dealers traded ahead of their clients (front running) and colluded to rig currency markets. Citigroup is the biggest player in the $5.3 trillion-a-day foreign-exchange market, according to a Euromoney Institutional Investor survey. Citigroup's 16.4 percent market share tops Deutsche Bank's 15.67 percent.
As is usually the case, the first bank to cooperate with authorities will get off dirt cheap. UBS and Barclays skated $4.3 billion in antitrust fines which were waived by the European Union authorities last December in exchange for their full cooperation in a euro rigging and yen interest rate derivative scandal. Not so lucky were six other banks that were fined 1.7 billion euros.
Once again, the biggest banks which take the biggest risks get the biggest discount for their wrongdoing, and nobody ever goes to jail. They aren't too big to fail; they're too big to jail.
This madness has no end in sight. Currency rigging is big business on a colossal scale. Considering that $5.3 trillion is traded every day, imagine how much money can be made from fixing the game. A billion here and a billion there can become real money very quickly. The banks merely consider the fines a cost of doing business.
Until authorities are willing to prosecute these criminals as criminals, why should they stop their nefarious enterprises? Unfortunately, the revolving door at the Securities and Exchange Commission (SEC) prevents any meaningful probes. And the Justice Department is beholding to the administration who picks their leader.
To insure their good fortune, banks contribute to both political parties so that no matter who wins the White House or the congress, they have friends in high places. Back at the SEC, enforcement attorneys who prosecute the bad guys can't wait to put in their time so they can leave the SEC and defend the criminals they have been prosecuting.
Our founding fathers were quite concerned about the power of the banks. The Rotschilds were well aware of that power. "Give me control of a nation's money and I care not who makes it's laws" said Mayer Amschel Bauer Rothschild. James Madison said, "History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over government by controlling money and it's issuance."
Thomas Jefferson said it best, "I believe that banking institutions are more dangerous to our liberty than standing armies."
John Lawrence Allen, a nationally recognized legal expert, represents investors nationwide in securities arbitration. Mr. Allen’s second book, “Make Wall Street Pay You Back,” was just released. For more information visit www.MakeWallStreetPayYouBack.com
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