Standard Chartered Plc, Societe Generale SA, Bank of Tokyo-Mitsubishi UFJ Ltd. and RBC Capital Markets were added to the list of major banks sued by their client over the manipulation of FX rates.
The lawsuit was filed by a group of clients, including individuals, institutional investors and hedge funds, that have engaged in FX swaps, futures, options and spot transactions with the banks. On Friday, the law firm representing the clients, Scott+Scott LLC, filed a revised complaint in which they expanded the scope of their claims against the sixteen banks already named as members of a conspiracy.
The lawsuit is the result of investigations by financial watchdogs and regulators around the world that focused on chat groups in which institutional dealers sent instant messages over their Bloomberg terminals. For a period of three years, in chat groups with names such as ”The Cartel” and “The Bandits’ Club,” bank traders shared information with competitors allowing them to execute their own trades before filling client orders.
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The FX rates manipulation scandal had serious negative effects on the brands of the major international banks as traders were exposed, clients had their confidence shaken and investors worried about the overall impact of the fines crossing over $10 billion.
Bank of America Corp., UBS AG, JPMorgan Chase & Co. and Citigroup Inc. have already settled their part in the lawsuit for a total of $808.5 million, according to Scott+Scott LLC. Using the information obtained from the banks that settled, the lawyers were able to come up with the new allegations against the other banks.