According to information distributed in a regulatory filing by the Bank of America Corp. the lender has settled an antitrust class action lawsuit for $180 million. The allegations brought forward in the case were connected to the bank’s role in manipulating foreign exchange market rates.
The bank has announced that it reached a settlement on April 16th, however the costs have not been publicized at the time. The payment will be covered from Bank of America’s existing reserves after the deal is approved by the court.
JPMorgan and UBS have already settled for $99.5 and $135 million
JPMorgan and UBS have already settled for $99.5 and $135 million. A group of other banks still remains on the hook, including Barclays PLC, Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc. and Morgan Stanley.
Understanding the Gaps in Forex TradingGo to article >>
According to a statement made by David R. Scott, whose company Scott & Scott LLP is one of the plaintiffs in the lawsuit, the settlement should serve as a signal to Wall Street banks that they need to change their code of conduct and put their customers’ interests first.
Judge Schofield rejected the banks’ claims that the U.S. plaintiffs failed to bring enough evidence of a potential conspiracy, finding that the facts laid out in the complaint, including the existence of chat rooms where traders “congratulated each other on the manipulation of ‘the Fix,’” were enough that discovery and trial were needed to determine their veracity. “The Fix” is an industry term for the median price of a widely traded currency 30 seconds before market close that sets the closing price for the day.
Plaintiffs include Aureus Currency Fund LP, the City of Philadelphia, the Board of Pensions and Retirement, the Employees’ Retirement System of the Government of the Virgin Islands, the Employees’ Retirement System of Puerto Rico Electric Power Authority, the Fresno County Employees’ Retirement Association, the Haverhill Retirement System and many others.
Pension funds appear to be the most affected parties. The claim was filed in 2012 when the plaintiffs took action alleging that they have been getting the worst possible foreign exchange rates when the banks were processing their transactions.
The plaintiffs, including the Louisiana Municipal Police Employees’ Retirement System, filed their complaint alleging rigging of the $5.4 trillion-per-day foreign exchange market in 2012. They alleged the banks routinely charged pension funds the worst possible forex rates when processing transactions on their behalf.