Traders at the bank were using chatrooms to engage in “coordinated trading strategies with traders of other institutions”, which the bank failed to tackle.
“BNPP’s deficient policies and procedures prevented it from detecting and addressing unsafe and unsound conduct by certain foreign exchange traders, including in communications by traders in multibank chatrooms,” an FRB document read.
This failure to act, along with other areas in which the board found the bank deficient, led to the FRB’s conclusion that bank had engaged in “unsafe and unsound banking practices".
The activity took place between 2007 and 2013 and a spokesman for the bank said BNPP “deeply regrets the past misconduct, which was a clear breach of the high standards on which the group operates”.
The FRB also ordered the bank and subsidiaries to improve controls and oversight of senior management.
This includes submitting an enhanced internal controls and compliance programme, to be submitted to the board within 90 days.
In September last year, fraudulent foreign exchange trader Alex Hope, who defrauded investors of around £2.25m was sentenced to 603 days’ imprisonment for failing to pay the full value of a confiscation order made against him in February 2016.