Banks under investigation in South Africa over alleged currency manipulation have hired the largest law firms in the country to advise them on the probe.
Bowman Gilfillan, ENSafrica and Webber Wentzel, three of the so-called Big Five legal firms, are assisting banks targeted in the South African Competition Commission probe, according to four people with knowledge of the matter, who asked not to be identified because the information isn’t public.
JPMorgan Chase & Co., Citigroup Inc., Barclays Africa Group Ltd., Standard Bank Group Ltd. and Investec Ltd. are among 11 companies suspected by the regulator of using electronic messaging software to coordinate foreign exchange deals when quoting prices to customers, the commission said on May 19.
The investigation may have been triggered by a bank seeking to mitigate any measures taken against it for market misconduct, Nick Altini, the head of law firm Cliffe Dekker Hofmeyr’s competition practice, said in a phone interview on Thursday. Cliffe Dekker and Norton Rose Fulbright LLP complete the Big Five group. In southern Africa the Big Five is more commonly used to refer to some of the largest wild animals -- elephants, buffaloes, rhinos, lions and leopards.
“The most likely scenario is that one of the firms being investigated has been advised that what they’re doing is illegal and that they could seek leniency by becoming a whistleblower,” Altini said. The probe could last between two and four years, he said.
The banks face fines of as much as 10 percent of their South African turnover, according to the Competition Amendment Act. The law hasn’t made collusion a criminal offense.
Webber Wentzel declined to comment. Bowman Gilfillan and ENSafrica weren’t immediately available for comment.