Davis Polk advised The Royal Bank of Scotland plc (“RBS”) on investigations conducted by the U.S. Department of Justice (“DOJ”) and the Federal Reserve Bank (“Federal Reserve”) relating to the foreign exchange (“FX”) spot market. On May 20, 2015, DOJ and the Federal Reserve announced settlements with RBS and other financial institutions related to their FX practices. These settlements follow resolutions in November 2014 with the U.K. Financial Conduct Authority and the U.S. Commodity Futures Trading Association related to the same conduct.

RBS, together with other financial institutions, pled guilty to a one-count information charging a violation of the Sherman Antitrust Act for conspiracy to fix, stabilize, maintain, increase or decrease the price of, and rig bids and offers for, the euro/U.S. dollar currency pair in the foreign currency exchange spot market, and agreed to pay a fine to DOJ of $395 million in addition to other obligations. DOJ cited the “substantial assistance” RBS provided to the investigation when recommending the imposition on RBS’s fine. The proceeding took place in the United States District Court for the District of Connecticut.

RBS, and the other financial institutions, also agreed with the Federal Reserve to separate Orders to Cease and Desist and Orders of Assessment of a Civil Money Penalty relating to the FX market, and RBS agreed to a penalty of $274 million. In assessing the civil money penalty on RBS, the Federal Reserve noted RBS’s identification of relevant conduct, full cooperation and ongoing enhancements to its compliance systems.

In addition, RBS reached an agreement to settle a consolidated antitrust class action brought on behalf of plaintiffs who entered into FX transactions with RBS or other defendant institutions. The agreement releases RBS from claims by class members related to any FX benchmark, fixing, or reference rate, as well as any claims regarding prices, spreads, or FX instrument rates. The agreement is subject to execution of a final settlement agreement and approval of the federal court in New York that is presiding over the matter.

Resolution of the matter benefited from a strong collaborative effort by a multi-disciplinary and cross-office team of litigators, corporate and regulatory lawyers, including members from the New York, London and Washington DC offices. The litigation team included Greg D. Andres, Arthur J. Burke, Joel M. Cohen, Linda Chatman Thomsen, Neil H. MacBride and Avi Gesser, as well as associates Melissa C. King, Jamie Bagliebter, Alyssa Beaver Gomez, Patrick Moroney, Jennifer Kan, M. Nick Sage, Alexander H. Bystryn, Nathaniel Hopkin, Charles Shioleno, Shirin Hakimzadeh, Kelly L. McNamee, Olga Kogan, Jonathan (Yoni) Schenker, Wendy Liu and Matthew R. Brock. The financial institutions group team included partners Annette L. Nazareth, Margaret E. Tahyar and Randall D. Guynn, as well as associates Zachary J. Zweihorn, Jai R. Massari, Jennifer E. Kerslake and Kelley L. O’Mara. The London corporate team included partner Jeffrey M. Oakes, counsel Connie I. Milonakis and associates Elisabeth Milan and Taylor Hedrick. The executive compensation team included counsel Erin K. Cho. The investment management team included partner Gregory S. Rowland and associate Brantley Hawkins.