European Commission fines four banks € 344m over Sterling Lads spot foreign exchange deal – Commentary



On December 2, 2021, the European Commission (the Commission) completed its investigation into the spot foreign exchange market, which led to fines that resulted in totaling 344 million euros against Barclays, Credit Suisse, RBS and HSBC. As a leniency applicant, UBS avoided a penalty.


Since 2013, the Commission has already opened and conducted six antitrust investigations in the financial sector. The last decision was made on May 20, 2021, when the Commission found that Bank of America, Natixis, Nomura, RBS (NatWest), UBS, UniCredit and WestLB (Portigon) violated EU antitrust rules through cartel activities of traders in the primary and secondary bond markets ‘European states. While the Commission at the time only fined Nomura, UBS and UniCredit, NatWest was not fined for disclosing the cartel to the Commission. Bank of America and Natixis were also spared, as their involvement in the cartel was time-barred, and Portigon (WestLB’s successor) was not fined as the bank achieved no net sales on the 2020-2021 fiscal year.

In the present investigation and the decision of 2 December 2021, the Commission has closed the third part of its investigation into the spot foreign exchange market, once again demonstrating its rigorous approach of banks to ensure the soundness and competitiveness of the financial sector, which is quite important for investment and growth. Indeed, the spot foreign exchange market is one of the largest financial markets in the world and, in the opinion of the Commission, by coordinating their behavior, the five banks have undermined the integrity of the financial sector to the detriment of of the European economy and European consumers.

While Barclays, RBS and HSBC decided to settle the case and were fined a total of 261 million euros, Credit Suisse decided not to settle the case and was fined 83 million. euros according to the ordinary procedure. Finally, UBS, as a leniency applicant, avoided a penalty of around 94 million euros.

This survey focused on trading the Group of 10 (G10) currencies. The world’s G10 currencies are the most liquid and traded currencies, five of which are used in the European Economic Area (EEA).(1)

Typically, companies trade large amounts of different currencies through a currency broker. The main clients of currency traders are:

  • asset managers;
  • pension funds;
  • hedge funds;
  • large companies; and
  • other banks.

According to the findings of the Commission, certain operators responsible for spot foreign exchange transactions in G10 currencies on behalf of sanctioned banks exchanged sensitive information and transaction intentions; they coordinated their trading strategies through the Sterling Lads online chat room.

Based on this exchange of information in the chat room, traders were able to decide precisely when and whether to sell or buy the currencies they were holding in their portfolios, depending on the market situation. This has eliminated the risk of uncertainty, as under normal competitive conditions traders often have to take risks independently with their decisions. Additionally, by getting along in the chat room, traders were also able to identify when coordination was possible. For example, some traders would temporarily forgo trades so as not to interfere with those of other traders.


The fines were set in accordance with the 2006 Commission guidelines on the method of setting fines. Regarding the level of fines, the Commission considered:

  • the turnover of the cartel participants for financial products relating to the EEA;
  • the seriousness of the offense;
  • the geographic scope of the agreement; and
  • the duration of the agreement and of individual participation in it.

UBS informed the Commission of the existence of the cartels and obtained full immunity from fines. Barclays, RBS and HSBC’s fines were reduced in consideration of their cooperation in the investigation and on the basis of the 2008 Settlement Notice:

  • Barclays received a 30% reduction under the Leniency Notice and a 10% reduction under the Settlement Notice; the total fine was EUR 54.3 million.
  • RBS received a 50% reduction under the leniency notice and a 10% reduction under the transaction notice; the total fine was EUR 32.5 million.
  • HSBC received a 15% reduction under the leniency notice and a 10% reduction under the settlement notice; the total fine was 174.3 million euros.
  • Credit Suisse did not cooperate with the leniency or settlement process and therefore did not benefit from any reduction in this regard. However, he received a total reduction of 4% to reflect the fact that he was not held accountable for all of the allegations under investigation; the total fine was EUR 83.3 million.


Even after Brexit, the move suggests that the Commission could still be tasked with imposing fines on UK-based banks. In accordance with the EU-UK Withdrawal Agreement, the Commission remains the competent body for this matter, which was initiated before the end of the transition period. This is called a “continuing jurisdiction case”. In accordance with these rules, the European Union reimburses the United Kingdom its share of the amount of the fine once the fine has become final. However, the collection of the fine, the calculation of the UK share and the reimbursement will be carried out by the Commission.

This decision supplemented the Commission’s broader investigation into the foreign exchange market. Prior to this case, two other foreign exchange breaches were concluded, with settlement decisions adopted on May 16, 2019:

  • the Triple banana split settlement decision, which involved communications in three different consecutive discussion forums which were named “three way banana split”, “two and an half men” and “Only Marge”. This cartel included traders from UBS, Barclays, RBS, Citigroup and JPMorgan. The Commission imposed a total fine of EUR 811.1 million on Barclays, RBS, Citigroup and JPMorgan; and
  • the “Essex Express“, in which the Commission imposed a total fine of € 257.7 million on Barclays, RBS and MUFG Bank (formerly Bank of Tokyo-Mitsubishi). UBS was the addressee of both decisions but was not ordered to pay fine because it revealed the existence of the cartels to the Commission.

Generally, banks and other businesses are well advised to strengthen their compliance management systems to avoid cartels and other compliance issues, which often result in heavy fines. Repeat offenders are sentenced to heavier fines. Under the 2006 fine setting guidelines, repeat offenders can face a 100% increase in their fine for committing past infractions. When setting the fine, the Commission may take account of circumstances which lead to an increase or a decrease in the basic amount of the fine. This basic amount may be increased when the Commission finds aggravating circumstances such as:

  • a company continues or repeats the same or a similar infringement after the Commission or a national competition authority has concluded that the company has infringed competition law (in this case, the base amount will be increased up to 100% for each violation found);
  • refusal to cooperate or obstructing the conduct of its investigations by the Commission; and
  • the direction or instigation of the infringement. The Commission will also pay particular attention to any measure taken to compel other undertakings to participate in the infringement and / or to any retaliatory measure taken against other undertakings with a view to enforcing the practices which constituted the offense.

For more information on this topic, please contact Sebastien jungermann to Arnecke Sibeth Dabelstein by phone (+49 69 979 885 465) or by e-mail ([email protected]). Arnecke Sibeth Dabelstein’s website can be accessed at

End Notes

(1) The G10 actually includes 11 currencies:

  • Australian dollar;
  • Pound sterling;
  • Canadian dollar;
  • Danish Crown ;
  • Euro;
  • Japanese yen;
  • New Zealand dollar;
  • Norwegian crown;
  • Swedish crown;
  • Swiss franc; and
  • US dollars.


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