Maurice Blackburn, an Australian law firm, has filed a class-action lawsuit this Monday against five international investment banks. According to the statement published by the firm, the suit is seeking damages for colluding on foreign exchange (forex) trading strategies.
Specifically, the class action has been launched against UBS, Royal Bank of Scotland, JPMorgan, Citibank and Barclays, the same banks that have been caught up in similar currency market scandals in both the United States and Europe.
Maurice Blackburn has accused the large investment firms of colluding to rig FX rates between 2008 up until 2013, in order to increase profits at the expense of businesses and investors in Australia.
Specifically, instead of competing with each other, Maurice Blackburn alleges that traders from the bank shared confidential information, such as the details of clients and their orders. This information was shared in internet chatrooms, the lawsuit alleges, that was called “The Cartel,” “The Mafia” and “A CoOperative,” among others, the court documents state.
“The alleged cartel conduct caused loss to foreign exchange customers in Australia throughout the period 1 January 2008 and 15 October 2013 but artificially increasing the cost of buying certain currencies and artificially decreasing the price received when selling certain currencies,” the statement from the law firm said.
US Drops Case Against ‘Cartel’ Traders
As Finance Magnates reported in October last year, a US court dropped criminal complaints against three British traders accused of conspiring to rig the FX markets – Richard Usher, formerly of JPMorgan Chase & Co., Rohan Ramchandani, who worked at Citigroup Inc., and Chris Ashton, a former Barclays Plc trader.
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The case was closed two years after a United Kingdom court acquited the men. The case in the US alleged that the London-based trio allegedly created a chat group that they named “the Cartel” to coordinate trading of US dollars and euros and manipulate the prices of the exchange rates.
However, the case was dropped after the men asked a US judge to dismiss the case against them, saying they did nothing wrong as their banks “weren’t always in direct competition.”
In the United States, the five firms have been collectively fined more than $2.8 billion as Barclays, BNP Paribas, Citigroup, JPMorgan, Royal Bank of Scotland and UBS all entered into related guilty pleas.
All five firms named in the class-action have been contacted by both Bloomberg and Reuters and have either not responded or declined to comment.
Commenting on the suit, Maurice Blackburn principal lawyer Kimi Nishimura said in a statement: “Australian businesses and investors, particularly medium to large importers, exporters, institutional investors and businesses with operations overseas, have been affected by the distortion of the FX market by these banks.”
“Such cartel behavior cheats Australian businesses in circumstances where they may already have been vulnerable to currency fluctuations,” Nishimura added.