Investors Sue 12 Banks over Allegations of Forex Price Manipulation in U.S. Court

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Investors Sue 12 Banks over Allegations of Forex Price Manipulation in U.S. CourtVarious investors have sued twelve large banks through a consolidated antitrust lawsuit that accuses the lenders of colluding to manipulate foreign exchange prices.

The investors, who include among others, various pension funds, hedge funds and the city of Philadelphia, claim that the banks have colluded since January 2003 through email, instant messages and chat room discussions to fix the WM/Reuters Closing Spot Rates.

The litigation was filed in the U.S. District Court in Manhattan on Monday night, and merges several lawsuits that have been filed since last November.

The listed defendants include Goldman Sachs Group Inc, Bank of America Corp, UBS AG, JPMorgan Chase & Co, Deutsche Bank AG, Citigroup Inc, BNP Paribas SA, Morgan Stanley, Credit Suisse Group AG, HSBC Holdings Plc, Royal Bank of Scotland Group Plc, and Barclays Plc.

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The plaintiffs are clients of the named banks, which account for a combined 84 percent global market share of the forex trade, and 98 percent of U.S. spot volumes, according to Reuters.

The case follows the ongoing criminal and civil investigations in various countries over whether banks conspired to fix prices to bolster earnings at the expense of investors and customers. The Financial Stability Board, which regulates the Group of 20 big economies, has also been thrust into the investigations.

The plaintiffs said that dealers of the named defendants used names such as The Mafia, The Cartel and The Bandits’ Club to exchange private customer trading positions and orders and use tricks such as “painting the screen,” “banging the close,” and “front running/trading ahead” to fix prices.

When contacted, none of the spokespersons for the defendants offered any comment. The case is In re: Foreign Exchange Benchmark Rates Antitrust Litigation, U.S. District Court, Southern District of New York, No. 13-07789.

To contact the reporter of this story; Yashu Gola at yashu@forexminute.com