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Reports US

US stock market daily report (May 20, 2014, Tuesday)

May 21, 2014, Wednesday, 06:04 GMT | 01:04 EST | 09:34 IST | 12:04 SGT
Contributed by Millennium Traders

An in-depth probe of rate rigging is under way by the European Union. The investigation dates to 2011. On Tuesday, EU antitrust regulators charged France's Credit Agricole, HSBC Holdings plc (HSBC-NYSE) and JPMorgan Chase & Co. (JPM-NYSE) with rigging financial benchmarks linked to the euro. ICAP, the world's largest interdealer broker, will soon face charges of manipulation of the yen Libor financial benchmark. Officials involved in the preliminary view said the banks colluded to influence the pricing of interest rate derivatives tied to the Euro Interbank Offered Rate, or Euribor.

The three banks charged on Tuesday now have the opportunity to review documents gathered as part of the commission’s investigation. They have the opportunity to reply in writing to the accusations and request a hearing before representatives of the European Commission and national competition authorities.

JPMorgan reportedly said the EU charges are without merit and will defend itself as Agricole examines the charge sheet. A bank spokesman said, "JPMorgan Chase has cooperated fully with the European Commission throughout its investigation. The company believes that the statement of objections is without merit and intends to defend itself fully.”

HSBC reportedly said it intends to defend the bank vigorously.

European Competition Commissioner Joaquin Almunia said during a news conference, about  the ongoing Libor probe against ICAP, "In the coming days or weeks, we will probably issue a new statement of objections against the broker."

At several of the worlds largest banks, over 30 foreign exchange traders have been put on leave, suspended or fired as the forex probes in the various countries expand. Activity of key foreign exchange benchmark is the focus of the probe, tied to several exchange rates including the euro, sterling Swiss franc and yen which are set daily in London.

The next step of the ongoing investigation into suspected rigging and collusion in the trillion-dollar foreign exchange market - the world's biggest marketplace - by regulators remains undecided, per Almunia. Head of ECC retains the option to open a formal investigation into the case or keep things under wraps if enough banks decide to settle the charges and report the decision at the end of the investigation or settlement, whichever occurs.

Almunia, "We received lots of information and we are looking into this information. We are not yet at this moment when I can announce steps of this case."

In December 2013, the group refused to settle allegations with the EU and now, several months later, could face penalties of up to 10% of their global turnover, if found guilty of breaching EU antitrust rules.

EU competition authority said, "The Commission has concerns that the three banks may have taken part in a collusive scheme which aimed at distorting the normal course of pricing components for euro interest rate derivatives."

The investigations by American, British and other regulators into manipulation of Euribor and Libor, has ensnared a number of large global institutions. A dozen people also are facing criminal charges in Britain related to the manipulation of Libor.