Lawsuit Accuses 12 Financial Institutions
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Lawsuit Accuses 12 Financial Institutions of Rigging Prices to Boost Profit


A consolidated antitrust lawsuit filed in February 2014 accuses 12 large banks of conspiring to rig prices within the foreign exchange market. The case was filed in the United States District Court in the city of Manhattan and is referred to as Foreign Exchange Benchmark Rates Antitrust Litigation. The lawsuit allows the combination of multiple lawsuits that were filed against the banks beginning in November 2013.

Accused Financial Institutions

Among the defendants in the case include HSBC Holdings Plc, Bank of America, Barclays Plc, and Royal Bank of Scotland Group Plc. Additional banks accused in the lawsuit are Citigroup, Goldman Sachs, Credit Suisse Group AG, UBS AG, BNP Paribas SA and Morgan Stanley. These financial institutions have been accused in both civil and criminal investigations in multiple countries of rigging prices in order to boost their own profits.

Investors Making up the Plaintiffs

The plaintiffs for the lawsuit include multiple holders of pension funds and hedge accounts. The city of Philadelphia is represented in the lawsuit, while other plaintiffs hail from the Cayman Islands, Puerto Rico, Connecticut, Oklahoma, California and Massachusetts. Potential customers of the accused financial institutions make up an 84% market share globally.

Alleged Illegal Behavior

The plaintiffs accuse the financial institutions of conspiring to rig prices using fake names, including The Mafia, The Cartel and the Bandits' Club beginning in January 2003. Alleged use of chat rooms, email and instant messaging software is part of the lawsuit, and the plaintiffs are accused of manipulating Closing Spot Rates. Financial institutions are alleged to have exchanged confidential customer orders, discussed trading positions and implemented the following tactics in order to set prices: front running, trading ahead, painting the screen and banging the close. Lawyers for the plaintiffs allege that the price manipulation resulted in unfair expenses for the customers and investors.

Results of the Allegations

In addition to the lawsuit, the Financial Stability Board is currently examining the price manipulation allegations. This Board is responsible for regulating the Group of 20 leading economies. Additionally, many financial institutions have already taken disciplinary actions against employees. Over 30 employees have had their employment either terminated or suspended, including those working at Bank of America and BNP Paribas.

Desired Outcome of the Lawsuit

Lawyers representing the plaintiffs are seeking unspecified damages and triple damages. The plaintiffs also wish to use the lawsuit as a way to end the conduct that they accuse the financial institutions of committing.

Author’s Bio: This post was contributed by Quinn & Scattini, a leading law firm in Brisbane and Gold Coast. You can check out their blog to keep update on legal news.