The case accusing Barclays, Citigroup, JPMorgan, Royal Bank of Scotland, and UBS of foreign exchange rigging is scheduled to be heard at London’s tribunal on Wednesday.
The five global banks are facing a £1 billion ($1.3 billion) class-action lawsuit that seeks to compensate pension funds, asset managers, hedge funds, and corporations that lost out because these banks participated in a market manipulation scheme between 2007 and 2013. However, the total value of potential fines will depend on the number of forex trades executed in London, and the proportional impact of rate-rigging on GBP trades.
More specifically, the UK-based lawsuit alleges the banks in question acted in concert to manipulate either prices for bids, offers, or spreads for currency spot trades. They are expected to lay out charges of illegal activities conducted by those banks before imposing fines, which can reach 10 percent of their global turnover.
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The lawsuit mirrors US-style class actions
Scott + Scott is representing the investors in the current lawsuit that was filed at the Competition Appeal Tribunal back in June. The firm’s US arm, which opened a European office to lead the UK claim, led the class action suit that generated the original $2.3 billion in settlements two years ago. Other banks have also faced huge fines for allowing their traders to club together to rig prices in FX markets.
The lawsuit also mirrors US-style class actions, which have been popular means of litigation since they allow multiple parties to sue another under one banner. Since 2015, British courts were cleared to hear similar collective legal actions.
It comes just months after the EU antitrust regulator fined seven major banks EUR 1.07 billion ($1.2 billion) for trying to manipulate foreign exchange rates in yet another settlement in a global probe into the $6-trillion-a-day market.
While the EU’s investigation has lagged behind, regulators in the US, the UK, and Switzerland have already imposed up to $10 billion in penalties on a group of global banks. The EU’s latest step also comes nearly two years after fining banks over collusion on Libor and Euribor rates.