EU Fines JPMorgan 72 Mln. Euros - Update

(RTTNews) - The European Commission on Tuesday fined J.P. Morgan Chase & Co (JPM) a total of about 72 million euros for its involvement in rigging an international financial benchmark and for participating in a cartel for Swiss franc derivative.

The Commission fined J.P. Morgan 61.7 million euros on charges that the bank and Royal Bank of Scotland Group PLC (RBS, RBS.L) together manipulated the Swiss franc Libor benchmark interest rate between March 2008 and July 2009.

The Commission also said four international bank - J.P. Morgan, RBS, UBS (UBS), and Crédit Suisse (CS) - operated a cartel on bid-ask spreads of Swiss franc interest rate derivatives in the European Economic Area between May and September 2007. The Commission imposed fines worth a total of 32.4 million euros on this account; J.P. Morgan was fined 10.5 million euros, UBS 12.7 million euros, and Credit Suisse 9.2 million euros.

The aim of banks involved in the cartel was to lower the parties' own transaction costs and maintain liquidity between them while seeking to impose wider spreads on third parties.

Another objective of the collusion was to prevent other market players from competing on the same terms as these four major players in the Swiss franc derivatives market.

RBS avoided fines of 115 million euros because it revealed the existence of the cartels.

All banks recognized their involvement in the cartels, in exchange for a 10 percent reduction in their fines.

JPM is trading at $57.73, up $1.10 or 1.94%, on a volume of 6 million shares on the NYSE.