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Fed fines BNP Paribas $246 million on 'unsafe and unsound' foreign exchange practices

  • BNP Paribas has been slapped with a $246 million fine for allegations of improper trading practices in currency markets.
  • A former employee previously pleaded guilty to charges of price fixing in foreign exchange markets.
  • The bank was hit with similar charges and fines in May by state regulators.

The Federal Reserve Board said Monday that it will fine BNP Paribas and some subsidiaries $246 million for their "unsafe and unsound practices in the foreign exchange (FX) markets."

The board said the bank had insufficient oversight and controls over its FX traders, who allegedly discussed trading positions with competitors, using electronic chat rooms.

BNP Paribas said in a statement that it "deeply regrets the past misconduct which was a clear breach of the high standards on which the Group operates."

The bank said the fine is related to activity that occurred between 2007 and 2013. BNP Paribas said it has since strengthened internal oversight and compliance measures, but pledged to continue those improvements.

The fines come amid a larger Federal Reserve Board investigation of currency market manipulation. The board has also slapped UBS, Deutsche Bank and Barclays with enforcement actions.

In January, the Fed permanently banned a former BNP Paribas trader from the banking industry for his role in manipulating foreign exchange prices.

The trader, Jason Katz, pleaded guilty to the charge, as the Justice Department continued its global investigation into price fixing of currency markets.

In May, New York state regulators fined BNP Paribas $350 million for similar allegations of currency market manipulation. At the time, authorities said lack of proper oversight "allowed nearly unfettered misconduct by more than a dozen BNPP traders and salespeople."

— CNBC's Steve Liesman contributed to this report.