“The budget crunch at the U.S. Commodity Futures Trading Commission helped force the agency’s hand in reaching settlements with banks over the attempted manipulation of foreign currency exchange rates, but experts say it’s far from clear what the regulator gave up to quickly close the cases.

“On the surface, the agency scored a big victory on Wednesday. In the first enforcement actions in a high-profile, global probe, the CFTC was able to extract a combined $1.4 billion in penalties from five banks — UBS AG, JPMorgan Chase Bank NA, Royal Bank of Scotland PLC, HSBC Bank PLC and Citibank NA — as well as their pledges to improve oversight of their forex trading desks. All five settled the claims without admitting or denying wrongdoing.

“Some attorneys, however, wondered what would have happened with the cases had resources not been an issue with the CFTC.”

***

“But not everyone was pleased.

“Dennis Kelleher, president of the advocacy group Better Markets and a former Skadden Arps Slate Meagher & Flom LLP partner, said regulators stepped back from taking bold action against the alleged misconduct, which saw traders using online chat rooms to discuss trades that allegedly would rig benchmark rates such as the World Markets/Reuters closing spot price.

“Banks do not commit crimes; bankers, executives, supervisors and traders do,” Kelleher said in a statement. “Yet, not one single executive is being punished individually, and none of the banks even have to admit wrongdoing or disclose the details of their misconduct. Leaving the public in the dark is not just bad law enforcement policy; it undermines trust and confidence in prosecutors and regulators, as well as the banks and financial system themselves.”

***

Read the full Law360 article (Paywall) here: