RBS suspends bonuses for 18 employees as forex probe deepens

Royal Bank of Scotland has suspended the bonus pots of 18 traders as part of an internal investigation into foreign exchange rigging.

The state-backed lender announced on Tuesday that it had frozen the unvested awards of 18 individuals after trawling through millions of documents and scrutinising the conduct of more than 50 current and former staff in relation to attempted manipulation of the $5.3 trillion-a-day market.

Jon Pain, head of conduct and regulatory affairs at RBS, said: “To be clear, no further bonus payments will be made or unvested bonus awards released to those in scope of the review until it has concluded and its recommendations have been considered by the Remuneration Committee and the Board Risk Committee.”

The final review is not expected until the first quarter of 2015, and the number of individuals affected by bonus clawbacks could change as it remains to be seen whether the traders identified by the bank have done anything wrong.

RBS was fined £400m by global regulators last month for its involvement in the foreign exchange scandal. Authorities said traders had shared confidential information about client orders and coordinated trades to boost their own profits. RBS said last month that it remains in discussions with other regulators and could face further penalties.

HSBC, UBS, JP Morgan, Bank of America and Citibank also been fined as part of the global probe, bringing the collective fine to £2.6bn.

The Financial Conduct Authority and Bank of England’s investigation revealed last month that traders boasted about their attempts to rig the currency market. Transcripts from the chatrooms they used showed that RBS traders boasted: “what a job”, “bravo” and “[RBS] is god” once a fix had been completed.

Six RBS employees are currently undergoing disciplinary procedures, of which three are suspended from the bank pending further investigation, according to RBS.

A trader was arrested in Essex on Friday as part of a criminal investigation by the Serious Fraud Office (SFO) into foreign exchange rigging. While the identity of the banker has not been confirmed, sources said the employee worked at RBS and was the first person to be arrested in relation to the probe.

The bank declined to comment on the identity of the staff involved in the bonus suspension.

It remains to be seen whether the 18 traders whose unvested awards are frozen have in fact done anything wrong.