US Approves Lawsuit Against 15 Big Banks for FX Rigging

A Court within the US has agreed to permit institutional investors to pursue a class-action lawsuit. This lawsuit will be leveled against 15  major banks, and has accused all of them to have partaken in rigging forex rates.

The Usual Suspects

According to the filed lawsuit, all the accused banks were involved in a plot where they manipulated the prices of $6.6 trillion-a-day within the forex currency benchmark rates. According to the filing, these banks had allegedly done so between the years of 2003 and 2013.

The list of defendants against this lawsuit is extensive. Big names like Barclays, Bank of America, Citigroup, BNP Paribas, and Credit Suisse are all involved. Other names include Goldman Sachs, Deutsche Bank, JPMorgan Chase, HSBC, Royal Bank of Canada, Morgan Stanley, Royal Bank of Scotland, Standard Chartered, Societe Generale, and UBS. All of the aforementioned banks collectively controlled as much as 90% of the forex markets at some point in time.

Gearing Up For Prosecution

Lorna Schofield, a US District Judge of Manhattan, was the one that gave permission to continue the lawsuit. Within a public statement, she explained that acts like these are the reason why the antitrust laws were put in place, in order to prevent things such as these. This was given through a 40-page long decision that Schofield had written.

The plaintiffs, totalling almost 1,300, include a large portion of exchange-traded funds and mutual funds, as well as investors like Pacific Investment Management of Allianz SE, as well as BlackRock. All of which moved to Court against the big banks.

A Ripple Of Scrutiny

The lawsuit has leveled the banks with accusations of conspiring to share confidential orders and trade positions of forex with each other. While a tad on the nose, the accusation states they did this through chat rooms, whose names are rather uncreatively named “The Mafia,” “The Cartel” and “The Bandits’ Club.” For some, the names are overtly excessive

However, the banks stated that the plaintiffs could not manage to point out any specific transaction in order to showcase their manipulations, however. Boiling it down, this is as dubious as “I’m not guilty because you didn’t catch me doing it,” which is a strange statement to make, instead of simply denying the accusations.

The litigation itself was filed in November of 2018. As one would imagine, a large portion of plaintiffs had opted out of similar lawsuits, having received settlements valued at $2.31 billion from the various banks. However, these settlements sparked massive regulatory probes into the banks themselves, forcing several of them to cough up $10 billion in fines.

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