Standard Chartered has been exempted from a class action lawsuit against 16 banks for rigging the rates on the foreign exchange market. According to the charges, the financial institutions have been systemically engaging in manipulative practices at the cost of their clients to unfairly realize gains.
A U.S. judge has dismissed the charges against the British bank and stated that the institution has not been involved in harming the interests of a number of investors that have been engaging in currency transactions on almost a daily basis to assess market risks and to determine the value of their market positions in tandem with the FX fixing rates.
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Despite the initial dismissal, the U.S. District Judge in charge of the case, Lorna Schofield in Manhattan, has stated that the plaintiffs may substitute the charges against the bank with a unit of the financial institution named Standard Chartered Bank.
According to the statement issued by the judge, the plaintiffs might have inadvertently named the parent company of the unit which might have engaged in FX fixing manipulation. The parent company of Standard Chartered Bank, Standard Chartered plc, does not have any offices in the United States, which is limiting the power of the U.S. court system over the company.
Schofield rejected two other dismissal requests filed by Societe Generale and Bank of Tokyo-Mitsubishi UFJ Ltd. The institutions, together with Standard Chartered and Royal Bank of Canada’s RBC Capital Markets have been added to the lawsuit in January after the judge ruled that investors may add the institutions to the remaining twelve banks against which the class action was initially filed.