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Banks tear into CompCom’s currency-rigging case

Allege that the competition watchdog has not complied with the principles of fairness.
More than 30 individuals linked to 23 banks are accused of rigging trades in the rand-US dollar currency pair to boost profits. Picture: Waldo Swiegers/Bloomberg.

Commercial banks accused of rigging currency trades have poked holes in the Competition Commission’s case against them, saying the competition watchdog is relying on broad accusations that lack hard evidence.

The commission’s case against bank traders kicked off on Monday, with the Competition Tribunal hearing various objections from banks mainly on the clarity of evidence, the jurisdiction of the commission over foreign entities, and the lapse in the period of bringing charges. The censure of the commission’s conduct through a declaratory order was also heard. 

The case, in which more than 30 individuals linked to 23 banks are accused of rigging trades in the rand-US dollar currency pair to allegedly boost profits, was referred to the tribunal in February.

The commission is pushing for a 10% fine on annual turnover against Standard Bank of SA, Investec Bank, Bank of America, Merrill Lynch International, BNP Paribas, JP Morgan Chase, HSBC Bank, Macquarie Bank, Barclays Capital, Credit Suisse Group and others.  

However, Wim Trengove SC, who spoke on behalf of Investec Bank, told the tribunal that the commission is not complying with principles of fairness in its case. “On all scores, banks are failed by the commission with broad allegations without granularity [in evidence],” Trengove argued.

The commission found that from at least September 2007, banks had a general agreement to collude on prices for bids, offers and bid-offer spreads for the spot trades in relation to currency trading. The commission’s case was completed in April 2015. 

Trengove said banks have no understanding of what the general agreement – the nub of the commission’s case – refers to.  “We don’t know how the agreement was made. We suspect that they [the commission] don’t know any of those allegations. They must tell us how and when the agreement existed.

“The allegation is that all of the banks engaged in ongoing price fixing with one another. This was made with a complete lack of granularity on evidence.”

In the case of Investec, Trengove said the commission accused it of engaging in three incidents of price fixing between 2008 and 2011, but the competition authority failed to provide further evidence to support this claim. 

According to the commission, traders used platforms such as the Reuters currency trading platform and the Bloomberg instant messaging system (chatroom), as well as telephone conversations and meetings, to coordinate their collusive trading activities. 

Currency rigging

Alfred Cockrell SC, who spoke on behalf of HSBC Bank, Bank of America and Credit Suisse, said banks are confused as to whether the commission is referring to an overarching agreement or a series of agreements that have contravened section 4 of the Competition Act.

Cockrell said a reading of section 4 doesn’t prohibit price fixing, but it prohibits an agreement for a concerted practice that involves price fixing. “The case is irregularly pleaded,” he said. “There are no facts pleaded that shows that there was an agreement or a concerted practice.”

The banks argued that the charges were initiated more than three years after the alleged currency-rigging practices ceased – a legal principle known as prescription under section 67 (1) of the Competition Act.

Cockrell argued that the initiation of charges happened in 2015, three years after the alleged conduct price fixing had ceased. “If that requirement [prescription] is not satisfied, there can be no complaint and there can be no referral [to the tribunal] and in that case, the tribunal has no jurisdiction.”

A declaratory order against the commission 

Investec wants a declaratory order on the conduct of the commission, which it said has been “vexatious and unreasonable.” Advocate Kate Hofmeyr, representing Investec, has accused the commission of frustrating the start of the hearing since February 2017.

She said the commission has dithered on submitting further supplementary affidavits, missed deadlines in submitting heads of arguments, and changed its tune on its request for separate hearings of banks. “The banks have been put to great expense and time in responding to the conduct of the commission, which we say is nothing less than unreasonable and vexatious.”

Makgale Mohlala, the commission’s manager for the cartels divisions, said the commission will argue against Investec’s declaratory order request on Tuesday.

He also told Moneyweb on the sidelines of the hearing that its evidence and case is clear.

“We have gone beyond what the law requires us to do,” he said. “We have even identified traders from competing banks that were involved in manipulating the rand, where they are from, when they did it, what time, how they did it, what they said. What more can we really say?

“The ball is in their court, they must answer.”

The commission is gunning for banks to settle with it – like Citibank, which paid an administrative penalty of R69.5 million in March 2017. Meanwhile, Absa has applied for leniency, provided that it agrees to continue supplying the commission with information.

Five days have been set for this week’s hearings, ending on August 3, where other banks will make submissions.



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Once again, and as always, the CompCom, better known as one of the extortion arms of the brutal oligarchy that is the SA government, is attempting to bully its way to injustice. They merely need to make the general accusation of cartel behaviour and then the companies targeted for the special “10% of turnover” CompCom tax (being increased to 25% as we speak) have to fight for dear life against a foe that is a ghost, hiding behind draconian, destructive legislation.

What do you do with the collusion of the construction companies in 2010..?

Put him in the scuppers with a hose-pipe on him?

Those companies were fined heavily and none of them are exactly thriving right now, should we shut them down?

The difference here is they have identified a handful of traders who attempted to influence the FX market, which is basically impossible to do because it is massively liquid and absolutely no chance these guys had any impact. Put the traders in jail if proven but to ask for a 10% of turnover fee is just ludicrous to me. This had no impact on anything as far as I can see.

you’ll be amazed at what goes on in some banks – forex dealer running down loss by using other clients deal flows – with managements knowledge.

staff processing forex transactions passing on losses to other clients etc.

Darwin: there is the small matter of the individuals banks that ran for immunity in exchange for cooperation. Not even Trengrove is going to dismiss the substance of the case.

No tears from me : I regard what they (and bread and cement and construction and and and ) did as treason and would applaud jail terms

‘’It ain’t the thing you don’t know that gets you into trouble; it’s the things you know for sure what ain’t so’’


Methinks, the Competition Commission should just remind Investec and their Trengrove, that banks like Citi and Absa provided the smoking gun and admittance of guilt. I can help Trengrove and Cockrell by drawing some pictures after > 40 years in Treasury – it’s been happening for ages as certain dealers believe that they are above the law and don’t have to adhere to the ACI code of conduct!
Also funny how banks like HSBC, B of A ,Credit Suisse, via Cockrell now claims that they are ‘’confused’’ – Their parent companies paid billions of US$ overseas for doing exactly this, rigging exchange rates!
Broad accusations – haha! Absa and Citi was part of this but admitted and are co=operating with the authorities!
Trengrove and Cockeral methinks should start reading Barry Sergeant’s – Assault on the Rand – for context and to learn/see, how it’s done!
Maybe they should also read Nick Leeson’s – Rogue Trader and Jordan Belfort’s – The Wolf of Wall Street to ‘’broaden’’ their thought!
I fully support, Makgale Mohlala, of the Competition Commission, and methinks the SARB should also remind Trengrove and Cockeral of the ‘’conditions’’ of the Banking Licences that was allocated to their ‘’clients’’ – maybe some bells and whistles should be added to their licence conditions!

You forgot to mention your usual spiel about JCI/The Kebbles/Investec.

Koko – many thanks for the reminder but, here-goes!
‘’Laughter is the universal joyous evergreen of life’’ Abraham Lincoln
Firstly – Maybe you should complain to Moneyweb, if ever, or whenever I mention: Guptagate, Investecgate, Kebblegate, JCI, Tsec, Socgen, Randgold, Stephen Koseff, Peter Gray, Chris Lampbrecht, David Poole, Glen Agliotti, Allan Gray, AIN, EW Balderson, BNC, Bookmark, Hennie Buitendag, CMMS, CAM, Deutsche Bank, DRD, Enron, Farber, FSB, Frankel Consulting, Friedman, Froneman, Gold Fields, Harmony, Holland, IDC, Investec Asset Management, IBUK, JCI, JLCO, Kebble, Khumalo,Koppel, KPMG, Ktrengel, Legg, Lembede, Letseng, Liddle, Lonhro, Louw, Marcus, Matodzi, Nassif, NPA, Froneman, Nurek, Old Mutual, Plcer Dome, PWC, Rand Mines, Randgold, RR, Saminos, Sasol, Selebi, Simmer & Jack, Skeat. Smyth, SARB, South Deep, Steyn, Stratton, Swanepoel, Tambo, Tsec, Tuscan, Wakeford, Werksmans, Western Areas, Zimbabwe and Zuma.
This list is not exhaustive but it contains ‘’a few of my favourite things’’ that I follow and like to comment on – almost all the news that I comment on has been in the public domain for many moons.
How is things like there in Investec after the Randgold minority shareholders started suing Investec for ‘’oppressive conduct’’?

The competitions commision is doing more damage than good.

Ag shame, so confused are the banks?

Anybody that defends the banks is probably working for them or just stupid.

I read ‘Banks tear into CompCom’s currency-rigging case’ as ‘banksters into …’

Competition commission is appointed by Minister of Economic Development (Zuma appointee and Union Organizer – E Patel). Enver Daniels is Deputy Chairman. He was previously the State’s chief legal advisor . Have a look at his history in that role and you will know that the Competition Commission is compromised.

End of comments.





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