Citigroup Inc (NYSE:C) slashed its third-quarter earnings by $600 million due to ‘rapidly evolving regulatory inquiries and investigation’ over alleged manipulation of foreign exchange markets.

Other leading banks including JPMorgan Chase & Co. (NYSE:JPM) have enhanced legal reserves as well amid the foreign-exchange investigations.

Citigroup Restates Q3 Results Amid Mounting Currency Probes

Probe into forex business

Earlier this month, while unveiling its third-quarter results, Citigroup Inc. (NYSE:C) disclosed earnings of $1.07 per share, while net income was $3.4 billion or $3.7 billion excluding CVA/DVA.

In its regulatory filing Friday, New York-based Citigroup Inc. (NYSE:C) disclosed that it’s facing a U.S. criminal probe into the bank’s foreign exchange business. The bank had to enhance its third-quarter legal costs following investigations and “very recent communications with certain regulatory agencies related to previously disclosed matters”.

In its statement today, Citigroup Inc. (NYSE:C) revealed that its third-quarter net income was $2.84 billion for the three months ended September 30, instead of the $3.4 billion reported earlier. The increase in third-quarter legal costs, on top of $951 million disclosed earlier this month resulted from the criminal probe into the bank’s forex business.

Citing people familiar with the developments, Bloomberg reports the U.S. Justice Department may seek guilty pleas, including from at least one U.S. firm.

Citigroup’s second restatement in 2014

Citigroup Inc. (NYSE:C)’s latest restatement is the second this year following its earlier restatement of financial results amid allegations of wrongdoing.

As reported by Valuewalk, Citigroup Inc. (NYSE:C) revised its full pre-tax 2013 results lower by $360 million due to fraud in its Mexican subsidiary. The issue pertains to $585 million in short-term loans the bank provided to Oceanografia S.A. de C.V. (OSA), a Mexican oil services company, through an accounts receivable financing program.

Citigroup Inc. (NYSE:C) is one among six major banks that are expected to settle with Britain’s Financial Conduct Authority by mid-November for alleged manipulation of forex markets. Citing knowledgeable sources, Reuters reports the banks are aiming to settle for a total of around 1.5 billion pounds sterling, or $2.42 billion, with Barclays PLC (NYSE:BCS) (LON:BARC) indicating Thursday that it had set aside 500 million pounds for the third-quarter to cover potential fines.

Earlier this month, while unveiling its third-quarter results, Germany’s biggest lender Deutsche Bank AG (NYSE:DB) (ETR:DBK) (FRA:DB) disclosed that it anticipates litigation costs of EUR894 million ($1.1 billion) for the third-quarter 2014. After setting aside towards the litigation costs, the bank swung into a third-quarter loss.