JOHANNESBURG – Competition Commission has fined the local arm of Citigroup 69.5 million rand ($5.3 million) for its role in a foreign currency trading cartel, the regulator said on Monday.
The Competition Commission said last week that it had found that traders at more than a dozen local and foreign banks colluded to coordinate trading in the South African and U.S. currencies.
The Commission said it had set the fine for Citi Bank NA South Africa at less than 10 percent of its annual turnover after the bank “undertook to cooperate with the Commission.”
Following the announcement of the settlement Citibank N.A. South Africa said that it aimed to improve its internal systems and monitoring processes.
“Citi is pleased that the matter has been settled. We will continue building upon the changes that we have already made to our systems, controls, and monitoring processes. Fostering a culture of ethical behaviour has been, and continues to be, a top priority for Citi.”
The Commission alleged that from at least 2007 traders at Citibank N.A. and its competitors had a general agreement to collude on prices for bids, offers and bid-offer spreads for the spot trades in relation to currency trading involving the dollar and rand currency.
The Commission said traders manipulated the price of bids and offers through agreements to refrain from trading and creating fictitious bids and offers at particular times.
“This settlement was done to encourage speedy settlement and full disclosure to strengthen the evidence for prosecution of the other banks,” said the Commissioner, Tembinkosi Bonakele.
Two sources with direct knowledge of the matter told Reuters on Friday that Citibank and Barclays Plc had approached the competition regulator with information relating to the alleged rigging of the rand’s exchange rate. Barclays said on Friday it was cooperating with the regulator.
No one at the Commission was immediately available on Monday to comment on whether it had also reached a settlement with Barclays.