It would be the Wall Street equivalent of a parole violation: Just two years after avoiding prosecution for a variety of crimes, some of the world’s biggest banks are suspected of having broken their promises to behave.The Wall Street Journal reported 10/30/13, Barclays Takes $800 Million Provision Related to Forex Probes: Charge Weighs on U.K. Bank’s Net Profit:
A mixture of new issues and lingering problems could violate earlier settlements that imposed new practices and fines on the banks but stopped short of criminal charges, according to lawyers briefed on the cases. Prosecutors are exploring whether to strengthen the earlier deals, the lawyers said, or scrap them altogether and force the banks to plead guilty to a crime.
...As reported earlier by The New York Times, prosecutors are also threatening to tear up deals with banks like Barclays and UBS that were accused of manipulating interest rates, pointing to evidence that the same banks also manipulated foreign currencies, a violation of the interest rate settlements. The prosecutors and banks have agreed to extend probationary periods that would have otherwise expired this year.
The reopening of these cases represents a shift for the government, the first acknowledgment that prosecutors are coming to terms with the limitations of how they punish bank misdeeds. Typically, when banks have repeatedly run afoul of the law, they have returned to business as usual with little or no additional penalty — a stark contrast to how prosecutors mete out justice for the average criminal.
LONDON— Barclays PLC on Thursday reported a fresh £500 million ($800.7 million) legal provision related to investigations into the alleged manipulation of the foreign-exchange market.
...The provision comes as the first stage of a global probe into alleged foreign-exchange price rigging nears an end, and relates to “ongoing investigations into foreign exchange with certain regulatory authorities,” the bank said.
The U.K. Financial Conduct Authority is aiming to reach settlements within weeks with six banks after an 18-month probe into foreign-exchange markets....
....The gains helped offset a poor performance for Barclays’s investment bank, which for years has driven the group’s profit but is now being dramatically shrunk to make earnings more stable and to adapt to higher regulatory costs. It recorded a 10% decline in revenue to £1.66 billion from £1.85 billion, driven by a 25% revenue drop in its equities business. The unit was hit in June with a lawsuit by the New York attorney general alleging that the bank lied to clients about aspects of its electronic trading “dark pool.” Barclays filed to dismiss the suit in July, saying it was based on misleading information and cherry-picked facts.