Goldman Sachs Group Inc has reached a preliminary agreement to settle a lawsuit over currency-rate manipulation for US$129.5 million, a person familiar with the matter said.
The settlement could come within a couple of weeks, said the person, who asked not to be identified because the agreement has not yet been completed.
Investors sued Goldman Sachs and other banks in Manhattan federal court in New York, alleging traders had rigged prices in the US$5 trillion-a-day foreign exchange market.
JPMorgan Chase & Co agreed to settle the lawsuit for almost US$100 million and “provide significant cooperation” to the investors as they pursue their case against banks that have not settled, according to a Jan. 30 court filing.
Meanwhile, the US Department of Justice is pressing to reach currency-rigging settlements on Wednesday that are to include guilty pleas from five banks — one more than previously reported — according to two people with knowledge of the situation.
The fifth bank is Zurich-based UBS Group AG, one of the people said, asking not to be identified because the matter has not been made public. The other four — Citigroup, JPMorgan Chase & Co, Barclays and Royal Bank of Scotland Group — are to plead guilty to antitrust charges, people familiar with the matter have previously said.
UBS was the first bank to cooperate with the US Department of Justice’s antitrust division as it probed whether traders colluded to manipulate foreign-exchange rates, according to those people. That cooperation is to help shield UBS from antitrust charges, but the bank is still exposed to fraud charges.
The settlements with the US Department of Justice and other regulators sre to include rare guilty pleas involving US banks, with units of Citigroup and JPMorgan each expected to pay fines of about US$1 billion, people familiar with the situation said.
Citigroup’s penalty is to be among the highest of the group, according to three people familiar with the talks.
Traders used multibank chat rooms to discuss orders and coordinate working together to manipulate the market, and the US Department of Justice is basing the amount of the fines in large part on traders’ level of activity there, said two people familiar with the situation. One chat room that has been central to investigations, known as the Cartel, included traders from Citigroup, JPMorgan, UBS and Barclays.
The UK Financial Conduct Authority (FCA) is planning to announce a settlement with Barclays for currency rigging on the same day as the other settlements, another person familiar with the matter said. The British bank dropped out of the FCA’s ￡1.1 billion (US$1.7 billion) group settlement over foreign-exchange rigging in November last year at the request of the New York Department of Financial Services.
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