Hello and welcome to the Fides Weekly Update. Take a look at this week’s key trends, moves and developments in legal and compliance.
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Latest forex fine goes to BNP Paribas
BNP Paribas has been fined a further $246m this week by the US central bank that relates back to the manipulation of foreign exchange rates that took place between 2007 and 2013.
The Federal Reserve announced the penalty on Monday this week, arguing that the bank executed “unsafe and unsound practices in the foreign exchange markets”. This takes the total amount of fines they’ve delivered for forex manipulation to over $2bn, with the potential of more to come as a number of the central banks cases remain ongoing.
The bank also agreed to pay $350m to the New York Department of Financial Services in May to settle allegations of currency rigging.
The misconduct was carried out by numerous institutions, where traders from multiple global banks used electronic chat rooms to discuss and rig currency rates.
BNP Paribas is just the latest firm to be penalised for this scandal. Bank of America has also received a fine by the Federal Reserve and in May 2015, Barclays, RBS, Citi, JP Morgan and UBS were fined $5.7bn by the Department of Justice in New York. Barclays, RBS, Citigroup and JP Morgan all plead guilty, whilst UBS was granted immunity for being the first to report the rate rigging.
Meanwhile, three former London-based traders appeared in New York federal court on Monday to plead not guilty to charges connected with the manipulation of the foreign exchange market. Chris Ashton was Barclays’ global head of spot currency trading, Rohan Ramchandani was Citigroup’s head of G-10 spot currency trading, and Richard Usher was the chief currency spot trader for JP Morgan. All three face charges which could involve 10 years imprisonment and $1 million fine.
Investigations into rate rigging are still being run by US regulators, whereas the Serious Fraud Office closed its criminal investigation into allegations of price-rigging in March last year.
SRA hands out record-breaking fine
This week saw the Solicitors Disciplinary Tribunal (SDT) hand down the largest-ever sanction imposed against a law firm, as it fined White & Case £250,000 for failures to identify conflicts of interest and protect confidential client information.
The case in question relates to a $2bn Ukrainian commercial dispute, where the firm represented Ukrainian oligarch Victor Pinchuck in suing Ukrainian tycoons Igor Kolomoisky and Gennadiy Bogolyubov.
In January 2014, Mr Justice Field barred the firm from acting on the case after the failure to identify the conflict of interest was uncovered.
Three years on, the SDT found that the firm had allowed instructions to be accepted to undertake further work for clients without taking adequate steps to ensure that no conflict of interest existed or ensure the confidentiality of information provided to the firm by clients was protected, in such breaching the SRA code of conduct and principals.
It also fined lead partner David Goldberg £50,000 for his role in the case, and providing confidential information concerning the work undertaken to another partner in the firm involved in acting on a conflicting matter.
The SDT, however, did not allege that the firm or Goldberg had acted dishonestly, and did not pursue allegations of lack of integrity against either him or the firm.
White & Case, who assisted the SDT in this matter, agreed that it acted ‘recklessly’ regarding checks for client conflicts and ensuring the confidentiality of client information.
Prior to this, the SRA’s previous highest sanction of a law firm was against Clyde & Co. in March, when the SDT fined the firm and three of its partners £80,000 for breaching accounting and anti-money laundering rules
Movers & Shakers of the Week
Vivienne Williams succeeds Gary Allison who departs eight months into a three-year term as head of the firm.
Christopher Kellett is set to join magic circle rival Linklaters after 20 years at CC
German finance partner Sebastian Schoon joins the Munich office of Gibson Dunn.
Elliot Papageorgiou joins the Shanghai office of Clyde & Co from IP specialist firm Rouse, and is to be joined by four other Chinese-licensed lawyers.
Michael Green has left Enyo Law to join RGL Management Limited, an entity comprised of lawyers who are pursuing RBS on behalf of shareholders suing the bank over its role in the financial crisis.
Jon Lawrence is departing the Magic Circle firm to take up a pupillage at Brick Court Chambers
Office Openings & Closings
Mergers & Alliances