Big banks fail to dismiss U.S. currency rigging lawsuit

Wed Jan 28, 2015 5:51pm EST
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By Jonathan Stempel

NEW YORK (Reuters) - A federal judge on Wednesday said U.S. investors may pursue a nationwide antitrust lawsuit accusing 12 major banks of rigging prices in the $5.3 trillion-a-day foreign exchange market.

U.S. District Judge Lorna Schofield in Manhattan rejected the defendants' arguments that the case should be dismissed because of a lack of evidence that they colluded to manipulate the WM/Reuters Closing Spot Rates, known as the Fix, or that they impeded competition and caused harm.

"Fairly read, the U.S. complaint adequately alleges that defendants engaged in a long-running conspiracy to manipulate the Fix to defendants' advantage," Schofield wrote in a 30-page decision.

The bank defendants include Bank of America Corp (BAC.N: Quote), Barclays Plc (BARC.L: Quote), BNP Paribas SA (BNPP.PA: Quote), Citigroup Inc (C.N: Quote), Credit Suisse Group AG CSGN.VX, Deutsche Bank AG (DBKGn.DE: Quote), Goldman Sachs Group Inc (GS.N: Quote), HSBC Holdings Plc (HSBA.L: Quote), JPMorgan Chase & Co (JPM.N: Quote), Morgan Stanley (MS.N: Quote), Royal Bank of Scotland Group Plc (RBS.L: Quote) and UBS AG UBSN.S.

According to the 2013 lawsuit, these banks have held an 84 percent global market share in currency trading, and were counterparties in 98 percent of U.S. spot volume.

The 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.

Six of the defendant banks have accepted more than $4.3 billion of civil fines from U.S. and European regulators, nine have banned traders from multibank chat rooms, and all 12 have overseen the suspension or departure of more than 30 employees linked to currency operations, Schofield said.


The Bank of America building is shown in Los Angeles, California October 29, 2014.    REUTERS/Mike Blake