Daily Management Review

‘$90 Million’ Fine For BNP Paribas As Rate-Rigging Charges Ordered By CFTC


09/13/2018


Through an investigation conducted by the CFTC, the BNP Paribas was found to have made attempts of manipulating the “ISDAfix benchmark”. However, the latter seemed to have cooperated all through the process.



The BNP Paribas has been ordered to make a payment of “$90 million” as a “civil penalty” by the U.S. federal regulators as they settled the charges against “BNP Paribas Securities Corp” for manipulation attempt of the “ISDAfix benchmark”.
 
ISDAfix is used by investors as well as companies for pricing “swaps transactions, commercial real estate mortgages and structured debt securities”. According to the “Commodity Futures Trading Commission”, BNP Paribas was found to be making attempts to manipulate the “benchmark” for benefiting “its derivatives positions in instruments”. Moreover, the conduct, revealed by a statement, incorporated more than one trader besides supervisors.
 
The CFTC informed that from the year of 2007 to the year of 2012, BNP Paribas were trying to “manipulate the benchmark rate”, whereby the latter “deliberately” traded for moving towards “a direction at the precise time it was being set”. Additionally, CFTC stated that there was “false pricing reports” submission from the bank for further influencing the benchmark in a way profitable to it.
 
While, a statement coming from BNP Paribas stated:
“We accept the fine of $90m imposed by the CFTC and are pleased to have resolved this investigation regarding past conduct”.
 
However, the CFTC also acknowledged that the bank of BNP Paribas showed cooperation during the investigation process. Furthermore, the bank also implemented “significant remedial action” for tackling the concerned issue besides putting in place “internal controls”.
 
The said settlement concerning the BNP Paribas is the “latest in a series” which saw large banks paying fine to regulators for “rigging” market benchmarks. The Director of Enforcement at CFTC, James McDonald said:
“We won’t stop until all wrongdoers are held accountable — no matter how broadly the misconduct stretches across the industry”.
 
References:
reuters.com







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