JPMorgan settles currency manipulation lawsuit in U.S.

Mon Jan 5, 2015 5:01pm EST
 
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By Jonathan Stempel

NEW YORK (Reuters) - JPMorgan Chase & Co has become the first bank to settle a U.S. antitrust lawsuit in which investors accused 12 major banks of rigging prices in the $5 trillion-a-day foreign exchange market.

The largest U.S. bank will pay about $100 million, a person familiar with the matter said. Lawyers for the bank and the investors said a settlement had been reached in a letter filed on Monday with the U.S. District Court in Manhattan.

JPMorgan settled after mediation with Kenneth Feinberg, who also oversees a General Motors Co program to compensate drivers whose vehicles had faulty ignition switches.

Monday's settlement requires court approval, and settlement papers are expected to be filed with the court this month.

The 2013 lawsuit is separate from criminal and civil probes worldwide into whether banks rigged currency rates to boost profit at the expense of customers and investors.

JPMorgan agreed in November to pay roughly $1.01 billion to resolve such probes by U.S. and European regulators. Five other banks settled for an additional $3.3 billion.

In their complaint, investors including the city of Philadelphia, hedge funds and public pension funds accused the 12 banks of having conspired since January 2003 in chat rooms, instant messages and emails to manipulate the WM/Reuters Closing Spot Rates.

They said traders would use such names as The Cartel, The Bandits' Club and The Mafia to swap confidential orders, and set prices through manipulative tactics such as "front running," "banging the close" and "painting the screen."   Continued...

 
A sign outside the headquarters of JP Morgan Chase & Co in New York, September 19, 2013.  REUTERS/Mike Segar