Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious Outperformance
Find Stocks Now

U.S. judge orders 15 banks to face big investors' currency rigging lawsuit

Published 05/28/2020, 08:36 PM
Updated 05/28/2020, 08:41 PM
© Reuters. FILE PHOTO: Logo of Swiss bank Credit Suisse is seen in Basel

By Jonathan Stempel

NEW YORK (Reuters) - A U.S. judge on Thursday said institutional investors, including BlackRock Inc (N:BLK) and Allianz SE's (DE:ALVG) Pacific Investment Management Co, can pursue much of their lawsuit accusing 15 major banks of rigging prices in the $6.6 trillion-a-day foreign exchange market.

U.S. District Judge Lorna Schofield in Manhattan said the nearly 1,300 plaintiffs, including many mutual funds and exchange-traded funds, plausibly alleged that the banks conspired to rig currency benchmarks from 2003 to 2013 and profit at their expense.

"This is an injury of the type the antitrust laws were intended to prevent," Schofield wrote in a 40-page decision.

The banks, which sometimes controlled more than 90% of the market, included Bank of America, Barclays (LON:BARC), BNP Paribas (OTC:BNPQY), Citigroup (NYSE:C), Credit Suisse (SIX:CSGN), Deutsche Bank (DE:DBKGn), Goldman Sachs (NYSE:GS), HSBC, JPMorgan Chase (NYSE:JPM), Morgan Stanley (NYSE:MS), Royal Bank of Canada, Royal Bank of Scotland (NYSE:RBS), Societe Generale (OTC:SCGLY), Standard Chartered (OTC:SCBFF) and UBS or various affiliates.

In their complaint, the plaintiffs accused the banks of improperly sharing confidential orders and trading positions, and using chat rooms with such names as "The Cartel," "The Mafia" and "The Bandits' Club."

Banks were also accused of using deceptive trading tactics such as "front running," "banging the close" and "taking out the filth."

The banks countered that the plaintiffs pointed to no transactions where the alleged manipulation caused losses.

Schofield dismissed portions of some the claims, and dismissed some Allianz plaintiffs from the case.

Lawyers for the plaintiffs did not immediately respond to requests for comment.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

The litigation began in November 2018, after the plaintiffs "opted out" of similar nationwide litigation that had resulted in $2.31 billion of settlements with most of the banks.

Those settlements followed regulatory probes worldwide that led to more than $10 billion of fines for several banks, and the convictions or indictments of some traders.

Investors typically opt out of litigation when they hope to recover more by suing on their own.

The case is Allianz Global Investors GMBH et al v Bank of America Corp (NYSE:BAC) et al, U.S. District Court, Southern District of New York, No. 18-10364.

Latest comments

Mrs U.S. District Judge Lorna Schofield in Manhattan, WE NEED 150% PENALTIES of the obtained benefit, as a deterrent for the future!! Nothing else will do. Thank You Miss Lorna Schofield of Manhatten. You are our last hope!
typically it is likely pennies on a dollar so the scheme can continue on. lol. it's called operating expense.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.