For the first time in history, five of the six banks involved in the forex scandal will demand the return of millions of pounds’ worth of trader bonuses.
Following fines amounting to $4.3 billion from UK, US and Swiss regulators, as well as a surge in public demand for tougher action against rule breakers, Royal Bank of Scotland, HSBC, Citigroup, JPMorgain Chase and UBS have all begun exploring options for retracting bonuses from employees. These are believed to be based on an internal review of individual conduct.
While the move is legal under UK law, in the past banks have largely restricted themselves to withholding as-yet-unpaid bonuses. This will be the first time that money will actually be recalled on such an extensive scale – although JPMorgan did force some traders to pay back their bonuses in 2012, after the bank suffered a £multibillion trading loss.
A spokesperson for UBS told the Financial Times: “Naturally, where we find acts of wrongdoing, our policy to claw back and not pay out will come into effect.”
Meanwhile, investigations into the actions of individuals involved in the forex scandal have been launched by the US Department of Justice and the UK’s Serious Fraud Office.
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