Five major banks have agreed to pay more than $111 million in collective penalties to settle their involvement in an antitrust lawsuit alleging that their traders routinely manipulated the forex market for their own profit. In agreeing to settle, the banks have denied wrongdoing.
The settlement announced last week is concerning Morgan Stanley ($50 million), RBC ($15.5 million), Societe Generale ($18 million), Standard Chartered ($17.2 million) and Bank of Tokyo-Mitsubishi UFJ ($10.5 million).
Made public on Friday night, the preliminary cash settlement with investors, led by Kenneth Feinberg, was disclosed in papers filed in the U.S. District Court in Manhattan, and requires a judge’s approval.
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They join the nine banks who settled earlier in the year, and the total payouts to investors now amount to more than $2.12 billion, court papers show. Credit Suisse Group AG and Deutsche Bank AG have yet to settle.
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 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’.