On May 16, 2019,[1] the Commission announced that it had adopted two settlement decisions implicating a total of six banks and confirming their participation in two separate foreign exchange spot trading cartels in breach of Article 101 TFEU. The “Three Way Banana Split” cartel—named after one of the two online chat rooms at the center of the investigation—involved Barclays, RBS, Citigroup, JP Morgan, and UBS and led to total fines of €811 million. The “Essex Express” cartel involved Barclays, RBS, Bank of Tokyo- Mitsubishi (now MUFG Bank), and UBS, and total fines of €258 million. The Commission started its investigation in September 2013 following an immunity application from UBS which revealed the existence of both cartels and thus avoided total fines of around €285 million.

The Commission’s Investigation

The Commission found that between 2007 and 2013 certain forex traders,[2] who were responsible for aspects of spot trading at each of their respective banks, used online chat rooms to exchange sensitive information and trading plans relating to the G11 currencies.[3] The Commission found that the traders often knew each other personally and based on “closed circles of trust” with the “Essex Express” chat room—so named because most of the traders shared the same train from Essex to London.

The Commission concluded that these exchanges enabled the traders “to make informed market decisions” on whether and when to sell or buy the currencies they had in their portfolios. On occasion, the exchanges also allowed the traders to identify “opportunities for coordination.” For instance, traders agreed to a practice known as “standing down,” where some traders may have temporarily refrained from trading currencies to avoid interfering with a competing trader’s activities.

All of the banks agreed to settle with the Commission and admit to their traders’ wrongdoing, receiving a 10% fine reduction. In addition, with the exception of MUFG, all of the banks also applied successfully for leniency, and received fine reductions ranging from 100% to 10%. The Commission issued two separate settlement decisions, which correspond to the two sets of online chat rooms the traders used to communicate with each other. Details of each bank’s involvement in the infringements, including the duration of their participation and respective fines and reductions, are summarized in the table below.

Three Way Banana Split Infringement

Company Start of infringement End of infringement Leniency Reduction Settlement Reduction Fine (€ M)
UBS 10/10/2011 31/01/2013 100% 10% 0
Barclays 18/12/2007 01/08/2012 50% 10% 116
RBS 18/12/2007 19/04/2010 30% 10% 115
Citigroup 18/12/2007 31/01/2013 20% 10% 311
JP Morgan 26/07/2010 31/01/2013 10% 10% 229
Total Fine         811

Essex Express Infringement 

Company Start of infringement End of infringement Leniency Reduction Settlement Reduction Fine (€ M)
UBS 14/12/2009 31/07/2012 100% 10% 0
Barclays 14/12/2009 31/07/2012 50% 10% 94
RBS 14/09/2010 08/11/2011 25% 10% 94
MUFG 08/09/2010 12/09/2011 0% 10% 70
Total Fine         258


The Commission noted that it “will continue pursuing other ongoing procedures concerning past conduct in the Forex spot trading market.” These investigations take place under an “ordinary” non-settlement procedure, and involve at least Credit Suisse’s participation in “an alleged infringement which may have taken place in another chat room.”[4] In addition to these other forex related infringements, the Commission is also investigating an alleged infringement concerning U.S. dollar supra-sovereign, sovereign and agency bonds traded via online chat rooms between 2009 and 2015, as well as an alleged infringement resulting from the trading of eurozone sovereign bonds from 2007 to 2012.

Shortly after the Commission, the Swiss competition authority also issued its settlement decision fining Barclays, JPMorgan, Citi, and RBS a total of €91 million for similar conduct. The foreign exchange-related misconduct addressed in the Commission’s decisions have also been scrutinized by financial regulators in at least the U.S., U.K., and Switzerland, where fines in excess of US$4 billion have been imposed on a number of banks.[5]

Compliance and leniency strategies matter. Taken as a whole, the Commission’s scrutiny of bankers’ conduct from an antitrust perspective underscores the importance of maintaining robust and comprehensive compliance programs. In the current case, a single JP Morgan employee’s conduct in the “Three Way Banana Split” infringement led to a fine in excess of €200 million. In addition, early detection systems and a pre- formulated leniency strategy can be crucial in damage mitigation efforts, as evidenced by UBS’ avoidance of a nearly €300 million fine through its successful immunity application.

[1]      Settlement Decisions “Forex – Three Way Banana Split” and “Forex – Essex Express.” See Commission Press Release IP/19/2568.

[2]      Foreign Exchange, or “Forex” refers to currency trading. When companies exchange large amounts of a certain currency, they do so through a human Forex trader or an algorithm. The main customers of Forex traders include asset managers, pension funds, hedge funds, major companies, and other banks.

[3]      The G11 currencies are the most traded currencies by volume, namely: the Euro; Pound Sterling; Japanese Yen; Swiss Franc; US, Canadian, New Zealand, and Australian Dollars; and Danish, Swedish, and Norwegian crowns.

[4]      Statement from Commission spokesperson as reported by the Financial Times on May 16, 2019. See too Credit Suisse Securities (Europe) 2018 Annual Report, page 115.

[5]      FCA Press Release, “FCA fines five banks £1.1 billion for FX failings and announces industry-wide remediation programme,” November 12, 2014; CFTC Press Release (7056-14), “CFTC Orders Five Banks to Pay over $1.4 Billion in Penalties for Attempted Manipulation of Foreign Exchange Benchmark Rates,” November 12, 2014; and, FINMA Press Release, “FINMA sanctions foreign exchange manipulation at UBS,” November 12, 2014.