Banks Lawsuit: Preliminary Approval Granted for $2 Billion in Settlements

The FX rates manipulation scandal continues to have serious negative effects on the bottom lines and brands of the major

A U.S federal court on Tuesday granted the plaintiffs’ motion to preliminarily approve nine settlements in the Foreign Exchange Benchmark Rates Antitrust Litigation case. As we reported back in August, these settlements with Bank of America, Barclays, BNP Paribas, Citi, Goldman Sachs, HSBC, JPMorgan, RBS, and UBS will cost the banks well over $2 billion in total.

The lawsuit was filed by clients- including individuals, institutional investors and hedge funds- that have engaged in FX swaps, futures, options and spot transactions with the banks. According to global investigations, bank traders shared information with competitors allowing them to execute their own trades before filling client orders via Bloomberg terminal chat groups with names such as ”The Cartel” and “The Bandits’ Club,” for about three years.

Michael Hausfeld, chairman of a law firm representing plaintiffs in the case, stated yesterday after the court’s decision: “Today’s preliminary approval order represents a huge step forward for FX market participants that were harmed by the defendants’ cartel. We will continue to vigorously litigate this case against the non-settling defendants, and we are confident that the substantial cooperation provided by the settling defendants – much of which will be triggered by the order – will be instrumental in securing additional compensation for US investors.”

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Anthony Maton, managing partner at Hausfeld London, added: “US investors are moving closer to being compensated for the banks’ FX misconduct. For European, Asian, or other non-US investors, these settlements speak to the breadth of misconduct in the FX market. Concerted action in London – which Hausfeld is pursuing – represents the best opportunity for such investors to recover the losses suffered as a result of the banks’ misbehavior.”

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