The Department of Labor (DOL) has tentatively rejected requests by three global banks to continue managing U.S. pension funds. Bloomberg reports that in July it reviewed letters from the DOL to Deutsch Bank AG, Royal Bank of Scotland Group PLc and UBS Group AG informing the banks of its stance.
The banks had to seek the DOL’s nod because they had admitted that manipulated foreign exchange or benchmark interest rates. Royal Bank of Scotland Group PLc and UBS Group AG were among those that pled guilty when the Department of Justice had charged them with “conspiring to manipulate the price of U.S. dollars and euros exchanged in the foreign currency exchange.” Royal Bank of Scotland agreed to pay a $395 million fine.
And in April, Deutsche Bank agreed to pay an $800 million civil penalty to settle charges by the U.S. Commodity Futures Trading Commission that it had been “routinely engaging in acts of false reporting and attempted manipulation, and, at times, succeeded in manipulating the London Interbank Offered Rate for U.S. dollar, yen, sterling, Swiss franc and the Europ Interbank Offered Rate interest rate benchmarks critical to the U.S. and global financial markets.”
The tentative rejection may not mean that their requests ultimately will be rejected. The request and DOL response are only part of the process, which also entails opportunities for the banks to respond and for public comment. It is possible that in the process, the DOL could put further conditions on the banks’ continuing to serve as Qualified Professional Asset Managers.
The banks had to seek the DOL’s nod because they had admitted that manipulated foreign exchange or benchmark interest rates. Royal Bank of Scotland Group PLc and UBS Group AG were among those that pled guilty when the Department of Justice had charged them with “conspiring to manipulate the price of U.S. dollars and euros exchanged in the foreign currency exchange.” Royal Bank of Scotland agreed to pay a $395 million fine.
And in April, Deutsche Bank agreed to pay an $800 million civil penalty to settle charges by the U.S. Commodity Futures Trading Commission that it had been “routinely engaging in acts of false reporting and attempted manipulation, and, at times, succeeded in manipulating the London Interbank Offered Rate for U.S. dollar, yen, sterling, Swiss franc and the Europ Interbank Offered Rate interest rate benchmarks critical to the U.S. and global financial markets.”
The tentative rejection may not mean that their requests ultimately will be rejected. The request and DOL response are only part of the process, which also entails opportunities for the banks to respond and for public comment. It is possible that in the process, the DOL could put further conditions on the banks’ continuing to serve as Qualified Professional Asset Managers.
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