Naughty banks, again, but no jail. More big fines for some of the world’s biggest banks for transgressions in financial markets. This time five — JPMorgan Chase, City, UBS, Barclays and Bank of America — have been fined US$5.7 billion over manipulation foreign exchange rates. These fines are on top of billions of fines levied for a separate case of rigging a key interest rate, the London Interbank Offered Rate, which was wrapped up late last year. All up the fines total more than US$9 billion for these forex breaches and the Libor offences, which were concentrated in groups of traders employed by the banks. According to the Financial Times, the latest fines take the total of fines levied on banks since 2008 to more than US$160 billion. According to the US Justice Department, euro dollar traders at four of the banks describing themselves as members of “The Cartel” used an electronic chat room and coded language to manipulate exchange rates to increase profits. No bankers have been charged or gone to jail over the various offences, though many have been sacked. — Glenn Dyer
Naughty BHP. BHP Billiton has agreed to pay a $25 million fine to settle Securities and Exchange Commission charges after it violated America’s Foreign Corrupt Practices Act over hospitality offered to guests at the 2008 Beijing Summer Olympics from governments around the world, including some with whom the company was negotiating. BHP Billiton paid for 60 government officials and state-owned employees, mostly from Africa and Asia, plus spouses and others to attend the event, valued at US$12,000 to US$16,000 per package. “BHP Billiton recognized that inviting government officials to the Olympics created a heightened risk of violating anti-corruption laws, yet the company failed to implement sufficient internal controls to address that heightened risk,” said Andrew Ceresney, director of the SEC’s Division of Enforcement. BHP neither agreed nor denied the findings and said in a statement this morning “The SEC Order makes no findings of corrupt intent or bribery by BHP Billiton”. — Glenn Dyer
Fortescue loves the free market. According to the morning blats, Prime Minister Tony Abbott is about to toss Fortescue Metals Group and chair Twiggy Forrest right overboard by abandoning support for an inquiry into the iron ore market and specifically the activities of BHP Billiton and Rio Tinto. And when he does it, it will be another black mark against a politician who simply doesn’t understand business and its unique ability to try to protect its own interests, while projecting in the same breath, a serious, national concern. And so that has been with Forrest and his executives and others. Take yesterday’s effort from Fortescue CEO Nev Power, who yesterday denied that calls by his company went against free-market principles. He was quoted as saying that with just four companies — Rio Tinto, BHP, Vale and Fortescue — responsible for most of the world’s seaborne supply, the iron ore market was even more concentrated than the oil market, which is dominated by the OPEC cartel. “We hear a lot of discussions about free markets, but I can tell you if this was a domestic market it would be regulated like you wouldn’t believe,” he told a conference in Sydney. “This is highly concentrated and each of the four big producers has a massive impact over what the market structure is.” — Glenn Dyer
Fortescue loves the free market. Julia Gillard please stop laughing at Twigs vain attempt to influence the market.
Pity Glenn Dyer has joined the baltherers who know nothing about the long term function of the mining game. Twiggy is a con man and always has been. Never paid mining or company tax. Look at the long term prices guys. If you structure your operations to that you make money. If you ride on the coatails you don’t.