Banks Including Barclays Face U.S. Rate-Rigging LawsuitPatricia Hurtado
Banks including Barclays Plc, Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc. and Deutsche Bank AG must face a lawsuit by U.S. investors who accuse them of conspiring to manipulate rates for determining foreign-exchange prices, a federal judge ruled.
U.S. District Judge Lorna Schofield in Manhattan Wednesday rejected a bid by the banks for dismissal of suits filed by U.S. plaintiffs, including investment funds, pension plans and hedge funds. They accuse the banks of violating U.S. antitrust law by fixing the WM/Reuters rates, an industrywide standard used in determining closing prices in the $5.3 trillion-a-day foreign exchange market.
The judge rejected the banks’ argument that there wasn’t enough evidence of a scheme, ruling the plaintiffs had offered “direct evidence” of a plausible price-fixing conspiracy, including a chatroom in which traders gave themselves names such as “The Cartel,” “The Bandits’ Club” and “The Mafia.” The judge said the traders discussed their anticompetitive scheme and were “congratulating each other about the manipulation of the fix.”
Schofield granted the banks’ request to dismiss related suits filed on behalf of traders in foreign currency in South Korea and Norway, ruling there wasn’t a sufficient connection to New York,
The plaintiffs and one bank, New York-based JPMorgan Chase & Co., on Jan. 5 notified the judge that they had reached a settlement in principle, Schofield said.
Bloomberg LP, the parent company of Bloomberg News, competes with Thomson Reuters in providing news and information as well as currency-trading systems.
Erica Chase, a spokeswoman for London-based Barclays, declined to comment on the ruling, as did Bill Halldin, a spokesman for Charlotte, North Carolina-based Bank of America, Michael DuVally,a spokesman for New York-based Goldman Sachs, and Renee Calabro, a spokeswoman for Frankfurt-based Deutsche Bank.
Andrew Brent, a spokesman for New York-based Citigroup, didn’t immediately respond to voice-mail and e-mail messages left at his office seeking comment about the ruling.
The case is In Re Foreign Exchange Benchmark Rates Antitrust Litigation, 13-cv-7789, U.S. District Court, Southern District of New York (Manhattan).