USA MARKETS CRASH..EXPECTED...!!!

PAUL B. FARRELL 

Opinion: 100% risk of a 50% stock crash if Donald Trump wins nomination

Published: Sept 5, 2015 8:43 a.m. ET

By

PAUL 

B. FARRELL COLUMNIST

“Who will get the Dreary Recovery Going?” taunts Mort Zuckerman in a Wall Street Journal op-ed. The head of U.S. News & World Report warns America that a recession is coming: “They occur about every eight years and America is ill-prepared to weather the one on the horizon.” Ill-equipped.

Yes, the clock is ticking, every 8 years. 2000. 2008. Next 2016, even with a President Trump.

Another great newsman, Bill O’Neill, publisher of Investors Business Daily, author of perennial best-seller “How To Make Money in Stocks,” agrees: Markets have peaked and crashed roughly every four years for the last century, with bigger crashes, long recessions, every eight years. And still most investors will be ill-prepared.

Sounds like a double-teamed confirmation of Jeremy Grantham’s famous BusinessInsider prediction for 2016: “Around the presidential election or soon after, the market bubble will burst, as bubbles always do, and will revert to its trend value, around half of its peak or worse.”

Get it? A mega crash is coming, dropping half off its peak, down below Dow 5,000. Not just another 1,000-point correction like last month. But a heart-stopping collapse coinciding with the 2016 elections ... then a long systemic recession ... probably lasting till the 2020 presidential election, maybe longer ... no matter who’s in the White House, Doanld Trump, Jeb Bush or Hillary Clinton.

Yes, recessions hit every eight years. The last was just about 8 years ago, warned Zuckerman with these facts: “The period since the Great Recession ended in 2009 has seen the weakest U.S. recovery since World War II,” Our aging bull is actually warning us ... recession dead ahead.

Why no “urgency from the White House,” no push to strengthen the U.S economy, avoid the coming recession? asks Zuckerman. Why? GOP candidates are worse, immature teenagers offering a “handful of Band-Aids.” Any leaders? Trump the egomaniac? God help us.

Next another disturbing Journal op-ed gets tossed into the mix: Dick Cheney is on the attack, sounding like fellow Republican Trump’s motto, “Make America Great Again.” Build a bigger Pentagon war machine, says the architect of the $5 trillion Iraq War fiasco. His latest rally cry: “Restoring American Exceptionalism.” Sorry folks, but the GOP’s relentless efforts to sabotage the White House the last six years (like 50 repetitive and futile House votes to repeal Obamacare) was the exact opposite, an “exceptional” failure of leadership.

The former vice president also quoted conservative columnist Charles Krauthammer: We’re at a “hinge point in history.” And former New York Times war correspondent Chris Hedges one-upped Cheney in Salon.com: The “world is at a crisis point the likes of which we’ve never really seen.” Like the 1848 European revolutions. Hedges even warns liberals, “climate change is the least” of the world’s problems, don’t even think that “voting for Hillary will make any difference.”

Tell Trump the ISIS War will increase taxes, add trillions of new debt

Yes, folks, the GOP neo-con hawks are back at it again, want new wars ... liken Obama to Hitler ... fueling Cheney’s latest bout of extreme hubris ... arming another Bush effort to take over America a third time ... Cheney claims America is weaker today than at the start of his costly ill-fated Iraq War. He should endorse Trump, they both want a new superpower military ready to start new wars, fight revolutionaries, add big debt, run up casualties.

So here we go again. Be exceptional. By fighting bigger wars? Show China we’re more macho? All as the Chairman of the Joint Chiefs Gen. Martin Dempsey is over in Iraq admitting this won’t be a short war, in contrast to Cheney’s claim we’d be in and out of Iraq fast after the shock-and-awe wave, even “greeted as liberators.”

Another $10 trillion loss, long recession dead ahead

Meanwhile, Dempsey admits the current ISIS war could take decades, with multiple deployments, bigger Pentagon budgets. On top of that, retired Navy Rear Admiral Len Hering warns that the risk to America’s national security is growing fast due to global climate change and rising resource conflicts, a product of the endless droughts and food shortages that intensify regional wars.

Yes, bigger wars, more costs. But unfortunately that’s “not a message the White House or Congress wants to hear,” says Foreign Policy’s Dan de Luce. Why? Politicians are lost without a moral compass, playing endless myopic political games, blind, in denial, threatening costly new wars that pile up more and more debt on top of the debt we were forced to borrow from China to finance Cheney’s Iraq War.

Perfect Storm: New president, Dow 5,000, recession, growth drops

All the recent turmoil is but a prelude to a “Perfect Storm” dead ahead: The recent 1,000 point drop ... slowing global economic growth... China’s market crash ... a Fed rate hike ... worst Dow volatility in 100 years ... the slow death of the oil era ... a long costly ISIS War ... droughts ... forest fires ... irrational climate science denialism ... and more.

And history tells us it doesn’t matter who’s elected president. Trump? Sanders? Hillary? Jeb? Doesn’t matter. Markets don’t care. Remember, McCain? Big crashes, recessions happen, about every eight years. Nobody really cares. Why? Once again we’re playing the game of musical chairs, gambling on the race for the 2016 White House.

And everyone’s playing: Everybody. We instinctively know the market’s headed for another fall. Again. Part of the game, right. In fact, knowing a big crash is coming makes the game more exciting, right! So we all just keep playing for another point, praying we can time our exit just before the coming collapse.

If 250% isn’t enough ... keep playing the game ... but play defense

Yes, the market is up over 250% since 2009. Time to get out? Yes, except the Wall Street casinos keep stirring the pot, there’s more life in this bull. So we keep playing for more gains, more thrills, in the race to the 2016 peak.

How big a crash? Twenty percent? Grantham’s 50%? Lose $8 trillion like 2000? Lose another $10 trillion like 2008? Seems nobody really cares anymore. Today’s game of musical chairs reminds us of that fabulous upbeat bank CEO in our favorite Robert Mankoff New Yorker cartoon who is sounding like Trump:

The CEO is at a podium motivating shareholders: “While the end-of-the-world scenario will be rife with unimaginable horrors, we believe that the pre-end period will be filled with unprecedented opportunities for profit.”

And that is the answer to Zuckerman’s question: “Who will get this Dreary Recovery going?” Answer: Nobody. Why? The question was rhetorical, he gave us the answer: “Recessions occur about every eight years. And America is ill-prepared to weather the one on the horizon.”

Yes, another recession is “on the horizon.” Also another $10 trillion crash. And another painful GOP loss in the 2016 elections.

http://www.marketwatch.com/story/100-risk-of-a-50-stock-crash-if-donald-trump-wins-nomination-2015-09-04?link=kiosk

IDEAS TO MINT MONEY..!!!

7 money secrets the rich don't want you to know 

The Motley Fool

Ask most personal finance experts and they'll tell you the secret to becoming rich is no secret at all: Work hard, live below your means and save every dime. The nation's One Percenters, however, might disagree.

There's no shame in a modest lifestyle -- even Warren Buffett lives frugally. But if your goal is to get rich, it's helpful to know these seven secrets the ultra-wealthy aren't likely to share.

1.  Salary isn't the whole story: 

Climbing the corporate ladder will only get you so far; at some point, you reach your earning potential and plateau. The rich know that in order to grow wealth, it's important to make your money work hard for you -- not the other way around. In fact, Robert Kiyosaki, author of the No. 1 best-selling personal finance book "Rich Dad, Poor Dad," built his entire money philosophy around this concept.

Generating income from passive, rather than active, income sources is the best way to do this. Investments that yield passive income include dividend-paying securities, rental properties, profits from a business you do not directly manage on a daily basis -- even royalties on creative work or inventions.

2. Take advantage of time, not timing

If the recent Dow Jones crash proves anything, it's that no one can predict what the market will do tomorrow. The wealthy know this and make no attempt to moonlight as day traders.

"Time is more important to investment success than timing," explained Peter Lazaroff, a certified financial planner who manages portfolios upwards of $10 million for Plancorp, LLC. "Most of the population believes that timing the market's moves is the key to growing rich through the stock market. The wealthy, however, understand that time and compound returns are the most important factor in growing wealth."

Though it might seem counterintuitive, getting rich requires investors to adopt an unsexy buy-and-hold strategy, ride out market fluctuations and ignore speculation.

3. Put it in writing

The difference between having an idea and putting it on paper is often what separates the uber-successful from average folks. And if you equate success with wealth, it might be time to start writing down your goals, both large and small, in order to become rich.

Thomas Corley, author of "Rich Habits: The Daily Success Habits Of Wealthy Individuals," noted that 67 percent of the wealthy people he surveyed wrote down their goals, while 81 percent kept a to-do list. If your goal is to become a multimillionaire, write it down along with an action plan for making it happen.

4. Understand value over cost

According to Justin J. Kumar, senior portfolio manager at Arlington Capital Management, "The wealthy person has three best friends: her attorney, her accountant and her advisor. The wealthy tend to use the law and tax code to their advantage when figuring out how to maximize their wealth, especially over multiple generations, and they are not afraid to spend money up front for counsel to get these answers."

Kumar explained it's common for middle-income Americans to cut corners in order to save money, yet ultimately find the results lacking. "The wealthy look at value over cost, but they are still prudent in their decisions," he said.

5. Eat out less

People who are concerned with saving money often skip the daily latte. The rich enjoy small splurges such as Starbucks whenever they want and instead look at saving from a bigger picture.

Author Paul Sullivan and colleague Brad Klontz, a clinical psychologist with an academic appointment at Kansas State University, conducted research on the difference in spending habits of the 1 percent and the 5 percent. The 1 percent spent 30 percent less on eating out and saved it for retirement instead. "And that, more than the cost of a Starbuck's latte, is what, over time, separates the wealthy from everyone else on the wrong side of the thin green line," Sullivan wrote in Fortune.

6. Be your own boss

Employees work to make their bosses rich. If you're aiming for true wealth, consider starting your own business. According to Forbes, nearly all of the 1,426 people on its list of billionaires made their fortunes through a business they or a family member had a hand in creating.

"Many middle class workers think that starting a business is too risky," noted Robert Wilson, a financial advisor and frequent contributor to CNN, NBC and CBS. "The wealthy understand that what's risky is allowing your time and earnings to be dictated by a boss who couldn't care less about whether you get what you want for your life."

7. Use other people's money

To the average person, "it takes money to make money" might sound like a tired cliche used to justify irrational spending. For the rich, it's a golden rule of wealth.

The key is leveraging other people's money to increase your own wealth.

"Trading time for dollars is a losers' game, especially as technology destroys many jobs that don't require a highly skilled human being," said Wilson. "Using money from banks/investors and hiring people to work for you is a time-tested formula for building wealth, not to mention the tax laws, which heavily favor businesses."

Whether you're fundraising to start a business or flipping real estate for a profit, relying on other people's money to do the heavy lifting greatly increases the return. Of course, it's also riskier than relying on your own funds. But if you follow the sage words of the great Warren Buffett, consider that "risk comes from not knowing what you're doing."

This article originally appeared on GOBankingRates.com.

The next billion-dollar iSecret

The world's biggest tech company forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here.

http://www.msn.com/en-in/money/topstories/7-money-secrets-the-rich-dont-want-you-to-know/ar-AAdYPlF

TAX EVASION, STOCK MARKET ROUTE!!

How they made Rs614 crore playing the system

Investors in four companies mis-used the tax benefit on long-term capital gains to make a huge profit

 

Rajesh Kumar 

Four small companies, a stock exchange platform, an intention to cheat, and misuse of tax laws—all came together to change the colour of the money.

Recently, in a letter to the Ministry of Finance, the Bombay Stock Exchange (BSE) suggested that differential treatment of capital gain between unlisted and listed securities should be harmonized as it is being used by some to manipulate stock prices and evade taxes. While long-term capital gains (LTCG) on listed shares is exempt from tax under Section 10(38) of the Income-tax Act, 1961, the same is 20% after indexation for unlisted shares.

The letter was motivated by a recent Securities and Exchange Board of India (Sebi) order, which looked into transactions related to four companies listed on the BSE’s small and medium enterprise (SME) platform. The transactions showed how the system was used by some “to convert ill-gotten gains into genuine one”, stated the Sebi order.

Modus operandi

Sebi looked into the transactions related to four companies, namely, Eco Friendly Food Processing Park Ltd (Eco), Esteem Bio Organic Food Processing Ltd (Esteem), Channel Nine Entertainment Ltd (CNE) and HPC Biosciences Ltd (HPC). All are listed on the SME platform of the BSE. All four companies were listed between January and March of 2013. What caught the regulator’s eye was the massive increase in share prices of these companies. Eco’s share price went up about 64 times between 14 January 2013 and 31 December 2014. Similarly, Esteem’s share price went up about 32 times between 7 February 2013 and 31 December 2014. The other two companies (CNE and HPC) also registered comparable increase in their stock prices. This was despite no improvement in their fundamentals. That was only the beginning of the story.

The Sebi investigation found that an entity named Goldline International Finvest Ltd (Goldline) was holding shares in three of the above mentioned companies. Further, it was allocated shares on preferential basis and, later, these companies issued bonus shares. The idea was to increase the share capital on the books of the companies. As the share capital went up, they approached the market with an initial public offer (IPO). Meanwhile, before the IPO, Goldline had transferred its stake in these companies to other entities. During the IPO, it has now been discovered, common entities were buying or funding buyers for all companies. “It has been observed during preliminary inquiry that a set of common entities were funding the IPO of all the aforesaid companies either through directly transferring the amount in the escrow account of the companies on behalf of certain IPO allottees or by transferring the amount to the concerned IPO allottees’ bank accounts, who, in turn, applied for the shares in IPO,” said the Sebi order.

After the IPO, the proceeds were transferred back to the funding entities either directly or through layers of transactions. That’s not all. What is interesting is that these IPOs came one after another and proceeds of one IPO were routed to buy shares of the other companies through the funding group. Naturally, the money raised through the IPO was not being used for the stated purpose. But that is only a minor offence in the given scheme and scale of operations.

People managing the show had different ideas. Once the shares were listed, as expected, the trading volume was low, but prices kept rising. As the lock-in period for the pre-IPO allotment of shares got over, volumes also began to rise. There was no corporate action to justify the spurt in volume and prices. In fact, as the regulator pointed out, these companies had poor fundamentals. Further examination revealed that connected entities were pushing stock prices for all the companies. This trading group also bought most of the shares from preferential allotees who had received them during the pre-IPO days. It was also learned that the trading group was receiving funds from several sources to do this. For example, one Ashvin Verma reported an annual income of Rs.1.81 lakh in financial year 2012-13 but received around Rs.38 crore between 12 September 2013 and 9 August 2014 from three different entities, which was later transferred to a stock broker. But why will someone give money to someone else to buy shares, and that too in companies that have no fundamental backing? As the market regulator discovered, the entire setup was created to make use of the stock exchange platform and misuse laws. Money was given to a set of participants to inflate stock prices and create a profitable exit route for investors who had received preferential allotment before the IPO.

“From the above facts and circumstances, I prima facie find that the preferential allottees, pre-IPO transferees acting in concert with Funding Group and Trading Group have used the stock exchange system to artificially increase volume and price of the scrip for making illegal gains and to convert ill-gotten gains into genuine ones,” said Rajeev Kumar Agarwal, whole time member, Sebi, in the order dated 29 June 2015, which banned 239 individuals and entities from the capital market till further direction. Sebi is also of the view that all this would not have been possible without the involvement of promoters and directors of these companies. Agarwal observed that all this was done to create fictitious LTCG, so that the unaccounted money of preferential allottees is converted into accounted funds and income can be shown from a legitimate source, the stock exchange. Funds were provided to the trading group through layers of transactions, so that the people and entities who got shares in the preferential allotment and transfers before the IPO could exit profitably.

As a result, according to Sebi, all the preferential allottees and pre-IPO transferees, together made a profit worth Rs.614 crore.

In response to Mint’s query about this case, a spokesperson of the Central Board of Direct Taxes said in an email, “Necessary action is being taken by the jurisdictional authorities in the Income Tax Department in the cases found actionable as per provisions of the Income-tax Act, 1961. Requisite coordination with Sebi is also being done wherever required.”

Will changing tax laws help?

In order to avoid such misuse of the stock exchange platform in future, the BSE suggested in the letter mentioned earlier that differential treatment of capital gains in listed and unlisted companies be removed. “Going by Sebi’s observations, there is a strong case for removing exemption on long-term capital gains tax as it is being used to evade taxes,” said Ashishkumar Chauhan, managing director and chief executive officer, BSE.

But not all are with the exchange on this suggestion. Prithvi Haldea, chairman and managing director, Prime Database, for example, said that the tax exemption on LTCG is for a reason and is a well thought out policy decision. “The problem is with law enforcement. You can change the tax laws but people will find some other way. My view is that surveillance and enforcement should be increased, and fear of punishment should work as deterrent,” added Haldea. Others are in agreement. “My response is that it (suggestion to remove exemption) is unfair to a large number of ordinary investors. We have a small investor base and the exemption is an excellent motivation,” said C.J. George, managing director, Geojit BNP Paribas Financial Services Ltd, adding that stock exchanges should improve their surveillance system. Dinesh Thakkar, chairman and managing director, Angel Broking Pvt. Ltd, also said that there is a need for processes that act as deterrents and remove people who use the system to evade taxes. “We have to follow the process that we are following. Since equity is a risky asset class, people need invectives to invest,” he added.

Clearly, what the regulator has exposed is a problem that’s too big and runs too deep to be contained by simply changing tax laws. For investors, this case once again reinforces an argument that has been consistently highlighted in these pages—that individual investors should stay away from investing in small companies as these are difficult to follow and prices can be manipulated.

http://www.livemint.com/Money/txqW73VK7bDUymK4pNWbZJ/How-they-made-614-cr-playing-the-system.html

RAJAN WARNS...! 1930s LIKE DEPRESSION IN WORLD ECONOMY!!!!

World economy may slip to 1930s-like depression: Rajan

Reiterates warning against competitive monetary policy easing by central banks

Press Trust of India  |  London  

June 26, 2015 Last Updated at 10:22 IST

RBI Governor Raghuram Rajan has asked central banks from across the world to define "new rules of the game" as he warned that the global economy may be slipping into problems similar to the Great Depression of the 1930s.

Rajan, who has been warning against competitive monetary policy easing by central banks, however, said the situation is different in India where RBI still needs to bring down lending rates to spur investments.

He expressed concern that the world may be slipping into the kind of problems of the depression of the 1930s and an international consensus was needed to be built over time.

"We need rules of the game in order to effect a better solution. I think it is time to start debating what should the global rules of the game be on what is allowed in terms of central bank action," he said at a London Business School (LBS) conference here last evening.

"I am not going to venture a guess as to how we establish new rules of the game. It has to be international discussion, international consensus built over time after much research and action," Rajan said.

"But I do worry that we are slowly slipping into the kind of problems that we had in the thirties in attempts to activate growth. And, I think it's a problem for the world. It's not just a problem for the industrial countries or emerging markets, now it's a broader game," he noted.

Asked specifically about interest rate cuts from an Indian perspective, he said, "I try to shut out market reactions as far as I can. We (India) are still in a situation where we have to spur investment and I am worried more about that."

CURRENCY RIGGING...PAY THE PENALTY!!!!

Six Banks Pay $5.8 Billion, Five Guilty of Market Rigging

Six of the world’s biggest banks will pay $5.8 billion and five of them agreed to plead guilty to charges tied to a currency-rigging probe as they seek to wind down almost half a decade of enforcement actions.

Citicorp, JPMorgan Chase & Co., Barclays Plc and Royal Bank of Scotland Plc agreed to plead guilty to felony charges of conspiring to manipulate the price of U.S. dollars and euros, according to settlements announced by the Justice Department in Washington Wednesday. The main banking unit of UBS Group AG agreed to plead guilty to a wire-fraud charge related to interest-rate manipulation. The Swiss bank, the first to cooperate with antitrust investigators, was granted immunity in the currency probe.

The four banks that agreed to plead guilty to currency charges are among the world’s biggest foreign-exchange traders. They were accused of colluding to influence benchmark rates by aligning positions and pushing transactions through at the same time. Traders who described themselves as members of “The Cartel” used online chat rooms to discuss their positions before the rates were set and suppress competition in the market, the Justice Department said.

All of the banks that pleaded guilty said they received needed waivers from the Securities and Exchange Commission to continue managing mutual funds and raise capital quickly, a person familiar with the matter told Bloomberg.

Read the Forex Settlement Documents:

• Press Release
• Bank of America Corp.
• JPMorgan Chase & Co.
• Barclays Bank Plc
• The Royal Bank of Scotland Group Plc
• Citigroup Inc.
• UBS AG

“Brazen Collusion”

The scheme was a “brazen display of collusion,” Attorney General Loretta Lynch said in astatement. “This Department of Justice intends to vigorously prosecute all those who tilt the economic system in their favor, who subvert our marketplaces, and who enrich themselves at the expense of American consumers,” she said.

The accords bring the total fines and penalties paid by the five banks to resolve the currency investigations to about $9 billion, the Justice Department said.

In the settlement with the Justice Department, Citicorp parent Citigroup Inc. will pay $925 million, the highest of the banks penalized. Barclays agreed to a fine of $650 million. JPMorgan will pay $550 million, and Royal Bank of Scotland Group Plc agreed to a $395 million fine. UBS will pay $203 million.

Separately, the Federal Reserve imposed fines of more than $1.6 billion on the five banks for “unsafe and unsound practices.” London-based Barclays will pay an additional $1.3 billion as part of settlements with the New York Department of Financial Services, the Commodity Futures Trading Commission and the U.K.’s Financial Conduct Authority.

Terminate Employees

As part of its settlement with New York banking superintendent Benjamin Lawsky, Barclays agreed to terminate eight employees engaged in currency trading between London and New York.

The Fed also fined Bank of America Corp. $205 million for failing to detect and address conduct by traders who discussed the possibility of entering into agreements to manipulate currency prices, according to a statement.

“The resolution will come out of our existing reserves,” said Lawrence Grayson, a spokesman for Charlotte, North Carolina-based Bank of America.

The penalties represent the first criminal resolutions in a two-year currency probe, which is ongoing, said Andrew McCabe, assistant director in charge of the Federal Bureau of Investigation’s Washington Field Office.

Other firms, including Deutsche Bank AG and HSBC Holdings Plc are still under investigation. Cases against individual traders also may be forthcoming, people with knowledge of the probe have said.

“Calculated Move”

The settlements show the eagerness of bank executives to end one of the last big legal cases dogging the industry. Scandals involving the aggressive sale of mortgage bonds and interest-rate rigging helped reinforce the view that some firms are too big to manage properly and should be broken up.

“This is a very calculated move to get the Justice Department off their backs, because otherwise this could go on for years,” said Phillip Phan, a professor at the Johns Hopkins Carey Business School. “In a way, there’s anonymity in the crowd -- you don’t know who’s more guilty than others.”

Although UBS wasn’t charged for currency manipulation, the government said the Swiss bank engaged in deceptive currency trading and sales practices after it settled a previous investigation in the manipulation of the London interbank offered rate in 2012. The conduct violated the non-prosecution agreement with the Justice Department.

UBS Markups

UBS traders and sales staff misrepresented to customers on certain transactions that markups were not being added, when in fact they were, using hand signals to conceal the markups, the Justice Department said in its statement. A UBS trader also conspired with other banks acting as dealers in the spot market by agreeing to restrain competition in the purchase and sale of dollars and euros, the government said. UBS’s collusive conduct occurred from October 2011 to at least January 2013.

Bank executives expressed embarrassment and frustration over the conduct, pointed a finger at a few bad apples and vowed to do better.

“The conduct of a small number of employees was unacceptable and we have taken appropriate disciplinary actions,” UBS Chief Executive Officer Sergio Ermotti and Chairman Axel Weber said in a statement.

JPMorgan said in a statement that the conduct underlying the antitrust charge against the bank is “principally attributable” to a single trader, who has since been dismissed.

“The conduct described in the government’s pleadings is a great disappointment to us,” said Chairman and CEO Jamie Dimon. “We demand and expect better of our people. The lesson here is that the conduct of a small group of employees, or of even a single employee, can reflect badly on all of us.”

Operations Continue

Shares of both JPMorgan and Citigroup slid 0.8 percent at 12:05 in New York. UBS climbed 3 percent, RBS rose 1.8 percent, Barclays advanced 3.4 percent.

JPMorgan and Citigroup said they don’t anticipate a material impact on operations or their ability to serve clients.

The Justice Department had been aiming to extract pleas from the banks’ parent companies, people familiar with the talks had said. In its announcement, the department characterized the companies entering pleas as “parent-level.”

Drexel Case

Citicorp, the unit agreeing to plead guilty, is wholly owned by parent Citigroup Inc. Citicorp, in turn, contains the company’s main banking subsidiary, Citibank NA, which held 74 percent of Citigroup’s assets at year-end. Royal Bank of Scotland Plc is a unit of Royal Bank of Scotland Group Plc.

The guilty pleas by Citicorp and JPMorgan are the first in criminal cases by major U.S. banks since Drexel Burnham Lambert admitted to six counts of mail and securities fraud in 1989. They follow pleas last year by the bank subsidiary of Zurich-based Credit Suisse Group AG for aiding tax evasion and BNP Paribas SA for violating U.S. sanctions. This year, a Deutsche Bank unit pleaded guilty for its role in manipulating interest rates.

The foreign-exchange investigation began after Bloomberg reported beginning in June 2013 that traders were colluding to manipulate benchmark currency rates and profit at clients’ expense. Their efforts were focused on the WM/Reuters 4 p.m. fix, used to value trillions of dollars of investments worldwide and to determine the price some companies and fund managers pay to swap currencies.

In October of that year, regulators around the world announced they were opening formal probes. Within weeks, more than 25 foreign-exchange traders at banks including Citigroup, JPMorgan and Barclays were fired, suspended or put on leave.

What began as a narrow inquiry into rate-rigging was broadened into a wider examination of the industry. In recent months, authorities have looked into practices including banks charging excessive commissions, sales staff passing on tips to favored clients and traders using inside information to place private bets on currency moves.

http://www.bloomberg.com/news/articles/2015-05-20/six-banks-pay-5-8-billion-five-plead-guilty-to-market-rigging