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Brazil exporters demand $3.8 billion from banks for currency manipulation

Stock Markets Jun 16, 2021 12:36PM ET
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© Reuters. FILE PHOTO: A view of containers at a port in Jaragua do Sul, Santa Catarina state, Brazil, October 22, 2015. Picture taken on November 22, 2015. REUTERS/Paulo Prada
 
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By Carolina Mandl

SAO PAULO (Reuters) -Brazil's biggest exporters, including Vale SA (NYSE:VALE) and Suzano SA, are demanding 19 billion reais ($3.77 billion) from a series of foreign and domestic banks in a lawsuit accusing them of manipulating foreign exchange rates, according to court documents reviewed by Reuters.

Exporters' association AEB, which had initially filed the lawsuit in 2018 without specifying damages, said Brazilian exporters suffered 107.4 billion reais in losses from banks' alleged manipulation of currencies between 2010 and 2011. AEB's compensation calculations took into consideration that the association represents 20% of Brazilian exporters.

Among the banks named in the lawsuit are Itau Unibanco Holding SA, Banco Santander (MC:SAN) Brasil SA, HSBC (whose Brazilian unit was acquired by Banco Bradesco SA in 2016), Citigroup (NYSE:C) and BNP Paribas (OTC:BNPQY).

Citi said its conduct complies with rules. Bradesco declined to comment. Santander said it is still unaware of the class action, while Itau said it will contest the accusations. Other banks did not immediately respond to requests for comment.

AEB has not yet been able to make calculations for the period between 2008 and 2012, the full period it believes a cartel to manipulate exchange rates was in place, AEB's lawyer Bruno Maggi said.

Petroleo Brasileiro SA made similar allegations of manipulation in a lawsuit filed in April separately from AEB's, which represents 50 companies.

Brazilian antitrust watchdog Cade is also investigating potential currency manipulation by banks.

The compensation demanded by Brazilian exporters is the latest development in a global foreign exchange scandal, which has led to billions of dollars in penalties for banks worldwide. Allegations of widespread manipulation in the spot foreign exchange market were first reported in 2013.

Brazilian newspaper Valor Economico first reported this class action on Tuesday.

($1 = 5.0437 reais)

Brazil exporters demand $3.8 billion from banks for currency manipulation
 

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Comments (1)
Jun 16, 2021 8:18AM ET
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ofcourse they manipulate markets and so also fx rates ofcourse if u go to travel who gives u the rate in exchange of your own currency? if i go like thailand i nedd baht so or i go bank here or i go airport bank all same bank decide own rate and fools buy it, if i ask baht i have my app to take rate of that moment banks ripping u of with taking a higher rate so they earn more go try chat your bank ask rate and they give literally eurusd 1.19 now if your european. crooks
Youdontneed Toknow
Youdontneed Toknow Jun 16, 2021 8:18AM ET
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Fx manipulation has nothing to do with what you described.
 
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