German banking giant Deutsche Bank has agreed to pay $190 million in penalties to settle its involvement in an antitrust lawsuit alleging that the lender’s traders routinely manipulated the forex market for their own profit.
The preliminary cash settlement with investors was disclosed in papers filed in the US District Court in Manhattan on Friday, and requires a judge’s approval.
While it is not clear what the final payment will be, a fine as high as $190 million could easily be borne by Deutsche and the announcement did not rock investor confidence. The bank’s shares rose as much as 1.6 percent on Friday.
Deutsche Bank joins a line of global banks that have settled this year, with total payouts to investors now amounting to more than $2.3 billion, court papers show.
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The settlement announced last month concerns Morgan Stanley ($50 million), RBC ($15.5 million), Société Générale ($18 million), Standard Chartered ($17.2 million) and Bank of Tokyo-Mitsubishi UFJ ($10.5 million). In agreeing to settle, the banks have denied wrongdoing.
Other defendants include Bank of America, Barclays, BNP Paribas, Citigroup, Goldman Sachs, HSBC, JPMorgan Chase, Royal Bank of Scotland and UBS.
In their complaint, investors including hedge and pension funds accused the 16 banks, which controlled more than 80 percent of the global forex market, of having conspired since 2007 in chat rooms, instant messages and emails to manipulate the WM/Reuters closing spot rates.
The US authorities opened its FX probe of the German lender back in 2014, focusing on conduct using their electronic trading platforms.
The investors said that traders used chat rooms with names such as ‘The Cartel’, ‘The Bandits’ Club’ and ‘The Mafia’ to swap confidential orders, and set prices through manipulative tactics with colorful names such as ‘front running’, ‘banging the close’ and ‘painting the screen’.