Six RBS Traders Could Be Punished In Forex Probe

(Reuters) - Six Royal Bank of Scotland employees could face disciplinary action as part of an inquiry into failings in its foreign exchange trading, the state-backed British lender said on Tuesday.

RBS launched an internal review into its FX activities after it was one of six banks fined a combined $4.3 billion last month for failing to stop traders trying to manipulate currency markets.

"As a result of investigations so far, six employees have been placed into a disciplinary process, three of whom are currently suspended, pending continuing investigations," the bank said in an update.

It said it was reviewing the conduct of more than 50 current and former traders who were involved in the part of the investment bank that was the focus of regulators’ investigations.

RBS declined to comment on the identity of any of the staff under discipline proceedings. Reuters has previously reported that traders Paul Nash and Julian Munson were suspended in October 2013 and senior trader Ian Drysdale was suspended in February.

RBS said it had also identified a number of supervisors and senior management from the FX business at the time of the misconduct whose responsibilities were being considered.

The bank, 80 percent owned by the UK government after being bailed out during the financial crisis, has pledged to conduct "a robust and widespread" review of its failings.

It paid $634 million in fines to UK and U.S. authorities as part of the FX settlement, when authorities said traders had shared confidential information about client orders and coordinated trades to boost their own profits.

Regulators said the misconduct at the banks ran from 2008 until October 2013.

RBS's review, being led by Jon Pain, head of conduct and regulatory affairs, is expected to be completed in the first quarter of next year.

Bonuses from previous years to 18 people that have not yet been paid were frozen pending the outcome of the review.

"To be clear no further bonus payments will be made or unvested bonus awards released to those in scope of the review until it has concluded and its recommendations have been considered by the remuneration committee and the board risk committee," Pain said.