Seven major international banks are grappling with a growing number of class actions from US pension funds, following investigations into alleged manipulation of the global foreign exchange market. The lawsuits allege banks violated federal antitrust law when their senior traders shared sensitive market information in chat rooms to execute a variety of strategies to move key benchmarks rates.
Barclays, JP Morgan, Citigroup, Deutsche Bank, RBS, HSBC and UBS face a class action complaint filed last week by the Newport News Employees Retirement Fund, exposing them to potentially billions of dollars in damage. It claims that it was “injured as a result of the [banks’] anti-competitive conduct”. However, all seven banks declined to comment. Among the plaintiffs are also the Employees Retirement System of the Government of the Virgin Islands, who filed for damages in December, and the State-Boston Retirement System.
Since the infringements have been proven, the claimants would be entitled to recover three times the amount of their actual damages under antitrust law. Yet, a recent court decision establishing that antitrust law doesn’t apply to the alleged foreign exchange manipulation, may compromise their chances of winning.
In Europe, PGGM, the large Dutch pension fund, also confirmed that is it considering taking legal action over forex manipulation.
European pension funds have proven to be more reluctant to pursue legal action than their US counterparts. They are now waiting for the release of the European Commission and the UK’s Financial Conduct Authority’s findings to then consider taking legal action.
Please read the Financial Times article here.