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Royal Bank of Canada has reached a $4.4-million settlement with a Brazilian regulator over a former trader’s role in a cartel that allegedly manipulated foreign-exchange rates.

Canada’s largest bank and U.S. giant Morgan Stanley both reached agreements this week with the Administrative Council for Economic Defence, known by its Portuguese acronym CADE, after a three-year investigation targeting 15 major banks and 30 individuals.

Between 2007 and 2013, bankers allegedly engaged in anti-competitive behaviour to boost profits and minimize losses, “to the detriment of customers,” according to a statement CADE released Wednesday.

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Traders in Brazil and abroad used chat groups on Bloomberg terminals, which sometimes had unsubtle names such as “the cartel” or “the mafia,” according to the allegations. The regulator said there is “strong” evidence the defendants agreed to “fix prices” for currencies, and to co-ordinate buying and selling of currencies as well as price proposals to customers, putting competitors in the foreign exchange market at a disadvantage.

A statement from CADE also says the banks “possibly” shared commercially sensitive information such as details of negotiations, contracts and future prices as well as customers’ orders, among other things.

RBC and Morgan Stanley admitted to taking part in anti-competitive conduct as required by Brazilian law in order to settle the matter. They also agreed to cease any such conduct and co-operate with antitrust authorities.

“We are pleased to resolve this matter. Settlement is in the best interests of our clients and shareholders given the potentially significant time and costs that would be involved in litigating in Brazil,” an RBC spokesperson said in an e-mailed statement. “Importantly, however, RBC’s admission is limited to the unsanctioned conduct of a single former trader who left the bank in 2011.”

Neither the bank nor CADE named the former RBC trader.

When CADE launched the cartel investigation in the summer of 2015, it accused the banks of co-ordinating to influence reference rates for the foreign-exchange market, affecting the Brazilian real as well as foreign currencies. Reference rates have widespread influence in currency markets, acting as benchmarks for banks, governments, investment funds and individual investors.

When financial firms offering foreign exchange services aren’t competing, it hurts market conditions and the “prices paid by the clients,” according to CADE’s statement.

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Morgan Stanley agreed to pay $10.6-million, while one individual − Pablo Frisanco de Oliveira, who was not employed by RBC − will pay a $21,000 fine. Five other major banks including Deutsche Bank AG, HSBC Bank PLC and JPMorgan Chase & Co. had previously reached settlements in 2016.

Other banks and individuals are still under investigation, CADE said.

“We continuously work to enhance our policies and procedures to ensure all of our employees know their obligations under the laws of the jurisdictions in which we operate and to enable us to monitor all activity to ensure it is in compliance with law,” RBC’s spokesperson said.

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