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Big investors sue 16 banks in U.S. over currency market rigging

Reuters logo Reuters 08/11/2018 By Jonathan Stempel

a black sign with white letters: FILE PHOTO: The Barclays logo on top of one of its branches in Madrid © Reuters/Sergio Perez FILE PHOTO: The Barclays logo on top of one of its branches in Madrid NEW YORK (Reuters) - A group of large institutional investors including BlackRock Inc and Allianz SE's Pacific Investment Management Co has sued 16 major banks, accusing them of rigging prices in the roughly $5.1 trillion-a-day foreign exchange market.

he lawsuit was filed on Wednesday in the U.S. District Court in Manhattan by plaintiffs that decided to "opt out" of similar nationwide litigation that has resulted in $2.31 billion (£1.76 billion) of settlements with 15 of the banks.

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

FILE PHOTO: A Standard Chartered logo at its headquarters is seen through a window with raindrops, in Hong Kong © Reuters/Tyrone Siu FILE PHOTO: A Standard Chartered logo at its headquarters is seen through a window with raindrops, in Hong Kong The banks being sued are: Bank of America, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan Chase, Morgan Stanley, Japan's MUFG Bank, Royal Bank of Canada, Royal Bank of Scotland, Societe Generale, Standard Chartered and UBS.

a red sign on the side of a building: FILE PHOTO: A Bank of America logo in New York City © Reuters/Stephanie Keith FILE PHOTO: A Bank of America logo in New York City Investors typically opt out of litigation when they hope to recover more by suing on their own.

The plaintiffs in Wednesday's lawsuit accused the banks of violating U.S. antitrust law by conspiring from 2003 to 2013 to rig currency benchmarks including the WM/Reuters Closing Rates for their own benefit by sharing confidential orders and trading positions.

a sign on the side of a building: The logo of insurer Allianz SE is seen on the company building in Puteaux at the financial and business district of La Defense near Paris © Reuters/CHARLES PLATIAU The logo of insurer Allianz SE is seen on the company building in Puteaux at the financial and business district of La Defense near Paris This manipulation was allegedly done through chat rooms with such names as "The Cartel," "The Mafia" and "The Bandits' Club," through tactics with such names as "front running," "banging the close," "painting the screen" and "taking out the filth."

"By colluding to manipulate FX prices, benchmarks, and bid/ask spreads, defendants restrained trade, decreased competition, and artificially increased prices, thereby injuring plaintiffs," the 221-page complaint said.

a close up of a sign: FILE PHOTO: A view of the exterior of the Citibank corporate headquarters in New York, New York © Reuters/Mike Segar FILE PHOTO: A view of the exterior of the Citibank corporate headquarters in New York, New York Norway's central bank Norges Bank and the big public pension fund California State Teachers' Retirement System (CalSTRS) are among the several other named plaintiffs.

Many of the plaintiffs plan to pursue similar litigation in London against many of the bank defendants with respect to trades in Europe, a footnote in the complaint said.

a black sign with white text: FILE PHOTO: Royal Bank of Scotland signs are seen at a branch of the bank, in London © Reuters/Peter Nicholls FILE PHOTO: Royal Bank of Scotland signs are seen at a branch of the bank, in London Citigroup's $402 million settlement is the largest in the earlier litigation. Credit Suisse has yet to settle that case. Neither had an immediate comment on Wednesday's lawsuit.

The law firm Quinn Emanuel Urquhart & Sullivan represents the opt-out investors.

FILE PHOTO: The logo of Swiss bank UBS is seen at a branch office in Basel © Reuters/Arnd Wiegmann FILE PHOTO: The logo of Swiss bank UBS is seen at a branch office in Basel The case is Allianz Global Investors GMBH et al v Bank of America Corp et al, U.S. District Court, Southern District of New York, No. 18-10364.

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