Bank of America is close to sign a legal agreement with the federal regulators in order to settle a probe against its suspected currency market manipulation.
The bank made the disclosure in a press release on Thursday.
The market watchers are considering the bank’s misbehaviour as the latest sign of crackdown of the Wall Street.
In the media release, the American lender said that it had increased its legal expenses to deal with the fed investigation into the manipulation of the currency market.
Bank has, however, not made the names of the federal regulators public but the people linked with the news identified the government agencies as the Federal Reserve Bank and Office of the Comptroller of the Currency.
In a press statement, the bank said that it had recently undergone “advanced discussions” with the regulating bodies to figure out a potential settlement. Due to this, the bank is forced to raise its legal reserves so as to make timely payments of the expected fine.
Sources (known to the matter) said that the settlement is not final.
The raised legal bill has led to a USD 400 million charge that trim the third quarter earnings of Bank of America. The charge had resulted in the bank’s reported loss of USD 232 million in the quarter.
America’s USD 5 trillion currency trading market is the largest in the world. Traders from different banks are on the regulators’ radar as they are suspected of manipulating the market in order to influence the prices of particular currencies during the trading session. Some of these suspected banks include JP Morgan, Citigroup and others.
The market observers consider Bank of America as a smaller player in the currency market than its several other peers. Hence, penalties imposed on the bank are expected to be smaller.