Is Antony Jenkins going to resign? It’s a question worth asking because his predecessor did so back in 2012 when Barclays’ traders were found to have been manipulating LIBOR rates under his watch. Jenkins became chief executive of Barclays on August 2012 and Barclays was yesterday fined a total of $2.4bn for FX price manipulation which the New York Federal Reserve says took place between 2008 and 2014.
Barclays’ latest acts of malfeasance can’t be dismissed as the actions of a few. Regulators make it very clear that the problem was endemic. “The misconduct described in this Order was not confined to a small group of individuals,” says the New York Fed, “It involved more than a dozen employees, who acted with the knowledge and oversight of some senior desk managers.”
The FX scandal wasn’t restricted to Barclays’ traders’ incriminating chat room banter. Sales staff were also guilty of applying illicit ‘mark-ups’ to the prices traders gave them before quoting the prices to clients. These mark-ups enabled sales teams to generate additional revenues. Damningly, the Fed found that, ‘historically, specific targets were set for mark-ups,’ and that even though these targets no longer exist, ‘certain FX Sales employees said they aimed for mark-ups to contribute at least 20% of the total revenue they were credited with.’ Barclay’s co-head of UK FX hedge fund sales even gave regular ‘presentations to incoming FX Sales employees to teach them, among other things, how to charge mark-ups.’
Barclays’ compliance team comes out looking shambolic. When the bank’s Russian traders discussed fixing FX trades involving the ruble, compliance was out of the loop because there was no one who spoke Russian. While traders openly discussed fixing FX rates, the Fed says Barclays’ compliance monitoring professionals were looking for, ‘for confidential client information sharing, derogatory references to clients and bad language,’ and therefore missed the scandal unfolding beneath their noses.
Worst of all, the Federal Reserve notes Barclays’ FX wrongdoings took place just as the bank was paying fines for fixing LIBOR rates and that the bank dragged is heels on traders’ requests to provide guidance on the use of chat rooms.
It’s all a far cry from the bank’s Citizenship report of 2013, in which Antony Jenkins extolled the new ‘Barclays Way,’ which he said 85% of the bank’s staff had signed up to. Barclays did have a ‘way’ – it just wasn’t the one Jenkins had envisaged.
Separately, you might not want to take a job in accounting just because you can. Bloomberg reports that it’s three times easier for graduates to find jobs in accounting firms than it is for them to find jobs in investment banking, but graduates who go into accounting earn starting salaries of £25k, compared to £39k at investment banks and hedge funds.
On top of a $4.3 billion settlement last November, the fines take the total levied against foreign exchange rigging to nearly $10 billion, exceeding the $9 billion so far paid over Libor manipulation. (The Times)
Salespeople were using weird hand signals to dupe clients. (Bloomberg)
UBS was fined for the FX scandal. (Independent)
And so was RBS. (Scotsman)
Star trader Chris Rokos has hired former Brevan Howard colleague Borislav Vladimirov, a source with direct knowledge of the matter said, as he prepares for one of Europe’s most high-profile hedge fund launches later this year. (Reuters)
J.P. Morgan hired one dodgy trader and is now being fined $892m. (WSJ)
It’s a great year to work in high yield. (Bloomberg)
The head of high yield trading for BNP Paribas in EMEA is leaving. (Bloomberg)
Key Deutsche Bank investors are not happy: ““We urge the bank’s supervisory board to review the composition of the management board, taking its performance over the last three years and its new strategy into account.” (Bloomberg)
Deutsche Bank is revamping its board so that Anshu Jain will have control of strategy. (Bloomberg)
Nick Bowers, who spent the last five-and-a-half years at the top of Deutsche Bank’s corporate broking unit, will be joining Nomura in August as co-head of UK investment banking, (Financial News)
Lloyd Blankfein reiterated that Goldman Sachs is a technology company since it has 9,000 programmers. (Business Insider)
“Every morning, I awoke like a golden retriever puppy salivating to start the day, unfazed by my seventy-hour work weeks. – Until I got fired.“ (Huffington Post)
“You can’t expect to be a player in your industry in the UK if you haven’t been seen at the Chelsea Flower Show. It is a rite of passage.” (Financial Times)
Weirdly, Barclays is still hiring summer interns. (Barclays)