CADE enters into an agreement related to a cartel investigation into the offshore currency market

The Tribunal of the Administrative Council for Economic Defense ratified on Wednesday (12 May) a Cease and Desist Agreement with NatWest Markets PLC (formerly The Royal Bank of Scotland) The agreement is part of an administrative proceeding that investigates a cartel in offshore currency markets, involving the Brazilian Real and foreign currencies.

By signing the agreement, the financial institution acknowledges its participation in the unlawful conduct and commits itself to stop engaging in the conduct and collaborate with the investigation. In addition to it, the institution is to pay more than BRL 7 million, which will be destined to the Fund for De Facto Joint Rights (Fundo de Defesa de Direitos Difusos).

The proceeding was launched in July 2015 to assess an alleged manipulation of exchange rates in the market associated with foreign currencies, specifically in the spot foreign exchange market. CADE is also investigating an alleged manipulation related to the Brazilian Real (including financial products known as Forward Contracts with Cash Settlement) and the manipulation of benchmarks in the exchange market.

The alleged antitrust violations are believed to have been arranged through Bloomberg chat rooms, both in Brazil and abroad. These violations have effects in Brazil and may have allowed participating operators to be better equipped to obtain profits and avoid/mitigate losses, to the detriment of customers.

Other agreements

This is the ninth agreement signed as part of this case. In December 2016, five of the investigated financial institutions entered into agreements with CADE: Barclays PLC, Citicorp, Deutsche Bank S/A Banco Alemão, HSBC Bank PLC, and JP Morgan Chase & CO. In June 2018, agreements were signed between CADE and the Royal Bank of Canada, and between CADE and the American Morgan Stanley, in addition to an agreement signed with an individual.

The agreements previously signed resulted in BRL 226.4 million in financial contributions to the Fund for De Facto Joint Rights.