You are here: Home > Press Releases > CADE signs three agreements regarding a cartel investigation in the foreign exchange market


CADE signs three agreements regarding a cartel investigation in the foreign exchange market


Two financial institutions and an individual shall pay a total of BRL 42.9 million as pecuniary contribution
by Assessoria de Comunicação published: Jun 15, 2018 04:22 PM last modified: Jun 15, 2018 04:22 PM

The Tribunal of the Administrative Council for Economic Defense (CADE, in its acronym in Portuguese) approved, in the judgement session that took place on Wednesday June 13, three Cease and Desist Agreements (TCC in its acronym in Portuguese) to settle a cartel probe in the foreign exchange market, involving the Brazilian Real and offshore currencies.

The agreements were signed between CADE and the financial institutions Royal Bank of Canada and Morgan Stanley Bank, as well as Pablo Frisanco de Oliveira. A total of BRL 42.9 million will be collected for the Fund for the Defense of Diffuse Rights (FDD, in its acronym in Portuguese), as a pecuniary contribution.

In the TCCs negotiated with CADE's General Superintendence (SG, in its acronym in Portuguese), the signatories acknowledged their participation in anticompetitive conducts and committed to cease the practices and to collaborate with the antitrust agency in all aspects of the investigation helping to clarify the facts.

The proceeding regarding the parties that signed the TCC will be suspended until the complete fulfillment of the agreements negotiated with CADE.

Anticompetitive conducts

The administrative proceeding under which the TCCs were signed investigates an alleged manipulation of exchange rates in the Foreign Exchange Market (Forex or FX), specifically in the FX Spot Market.

CADE also investigates the alleged manipulation, involving the Brazilian currency, of non-deliverable forwards BRL, and the manipulation of benchmarks in the exchange market, such as those of WM/Reuters and of the European Central Bank.

The alleged anticompetitive conducts were practiced through chat groups in the Bloomberg platform, both in Brazil and abroad. According to the Technical Note of SG/CADE, there is strong evidence that the indicted parties would have entered into an agreement in order to fix the exchange rate spread; to coordinate the purchase and sale of currency and the price proposal for customers; as well as setting back the activity of other operators in the currency exchange market involving the Brazilian currency.

The competitors would also have possibly shared sensitive commercial information about the market, as well as details about dealings, contracts, future pricing; customers’ demands; strategies and negotiation goals; confidential positions in operations; and specific orders and the amount of performed operations (in and outflow).

The anticompetitive practices have direct and indirect effects in the Brazilian territory and might have allowed the participants to grant a better position to obtain profit and avoid or minimize losses perpetrators a better position to obtain profit and avoid/minimize losses, harming the customers.

Signing parties

According to the agreements signed, Morgan Stanley Bank commits to pay, as a pecuniary contribution, BRL 30.28 million; while the Royal Bank of Canada commits to pay BRL 12.58 million; and Pablo Frisanco de Oliveira, BRL 60 thousand.

In December 2016, five financial institutions investigated in the administrative proceeding also signed TCCs with Cade: Barclays PLC, Citicorp, Deutsche Bank S/A, HSBC Bank PLC and JP Morgan Chase & CO.

The investigation regarding other financial institutions and individuals represented in the proceeding is still ongoing.

Access the Administrative Proceeding n° 08700.004633/2015-04 .