Rand-rigging investigation flops: More proof it’s SO EASY to pull off global money crimes

The wheels of justice turn slowly in South Africa and in some cases not at all. Take the 2015 rand-rigging scandal. So far, no-one in South Africa has been brought to book. Investigators appear to be incompetent and have been sent back to the drawing board by the Competition Tribunal. Then, there’s the mountain of money-laundering cases that have built up at the Reserve Bank. Huge sums and time and effort are put into getting bank customers to provide proof of residence and other information to ease minds that they are not up to devious deeds, yet clear cases of money-laundering on an industrial scale are not vigorously pursued. At the state capture inquiry, the Reserve Bank head of financial surveillance recently told how huge sums were transferred between accounts in questionable transactions yet police investigators have made no progress in building dossiers with a view to pressing charges. Elijah Mazibuko, reports eNCA, said that, over the last five years, the Reserve Bank has referred 64 cases to the police of possible contravention of the exchange control regulations – or money laundering – with no feedback or progress. – Jackie Cameron

South Africa tells investigators to clarify rand-rigging charges

By Vernon Wessels

(Bloomberg) – South Africa’s Competition Tribunal ordered antitrust investigators to clarify their charges of currency manipulation brought against more than 20 banks, drawing out a four-year legal battle.

The Tribunal, which adjudicates antitrust cases like a court, found deficiencies in referrals prepared by the Competition Commission and gave the body 40 days to redraft its accusations, according to a statement on Wednesday. It also rejected attempts to quash the case.

Most banks had complained about the vagueness of the case brought by the commission and asked authorities to dismiss the allegations. Standard Bank Group Ltd. said there was no evidence that it had participated in collusion and that the case was so contradictory and vague, the Johannesburg-based lender didn’t know how to respond.

“The commission would still need to allege that the conduct of the respondent banks had an affect in South Africa,” the Pretoria-based Tribunal said in the statement. It should also confine its case against the lenders “to one of a single over-arching conspiracy” and provide “more detail on such a conspiracy.”

Global probe

The order is the latest chapter in a saga that started in May 2015, when the commission alleged that banks including JPMorgan Chase & Co., BNP Paribas SA, Bank of Merrill Lynch, Investec and Standard Chartered Plc colluded to rig the value of the rand against the dollar. The commission eventually named 23 banks through three additional supplements to its original referral to the Tribunal.

The inquiry followed a global probe into currency manipulation that was exposed two years earlier, triggering investigations in the US and the UK To date, more than a dozen financial institutions have paid about $11.8bn in fines and penalties globally, with another $2.3bn spent to compensate customers and investors.

In its statement, the Tribunal said it doesn’t have the jurisdiction to extract penalties out of banks with no presence in South Africa and that any fines would be limited to a percentage of the representative unit’s revenue in the country.

There have been accusations of errors of process on both sides. In filings in May 2017, HSBC Holdings Plc and Investec said the commission named the wrong legal entities in its allegations. Standard Bank’s South African unit, Bank of America Merrill Lynch International Ltd. and Standard New York Securities Inc. all said the traders the commission accused of manipulation on their behalf had either never worked for them nor traded the rand.

“Standard Bank remains unaware of any evidence implicating it in the alleged collusion,” it said in an email.

Citigroup Inc. agreed in January 2017 to pay a R69.5m ($4.7m) fine for its alleged role in manipulating the rand, while Barclays Africa Group Ltd., which has since been renamed Absa Group Ltd., may be exempt from a penalty because it blew the whistle on the traders’ alleged actions. Nomura International Plc, Commerzbank AG, Macquarie Group Ltd., Australia & New Zealand Banking Group Ltd. and Commerzbank AG were also identified in the probe.

“The Tribunal found that the deficiency in the commission’s pleading was located in its unwillingness to commit itself unequivocally to a particular formulation of its case,” the authority said. This “caused a lack of focus and consistency throughout the various iterations contained in the referral and subsequent supplementary documents.”