WASHINGTON: Nine major banks charged with rigging foreign exchange rates have agreed to pay $2 billion in settlements to US investors, according to lawyers representing the investors
The nine banks include HSBC, Barclays, BNP Paribas, Bank of America, JP Morgan, Citibank, Goldman Sachs, RBS and UBS, said lawyer Michael Hausfeld in a statement Friday.
The investors represented by Hausfeld include hedge funds and pension funds.
“The completion of these settlements were announced in open court this afternoon; the settlements are expected to be submitted for preliminary approval in the near future,” Hausfeld said in a statement.
Besides agreeing to pay the compensation, the nine banks have also ” agreed to cooperate with investors in their continuing litigation against the twelve remaining defendants”. The others include Credit Suisse Group AG, Credit Suisse AG, Credit Suisse Securities (USA) LLC, Deutsche Bank AG, Deutsche Bank Securities Inc., Morgan Stanley, Morgan Stanley and Co., LLC, Morgan Stanley and Co. International plc, Bank of Tokyo-Mitsubishi UFJ Ltd., RBC Capital Markets, LLC, Societe Generale S.A., and Standard Chartered plc.
Several of these defendants were added to the class action lawsuit in an amended complaint filed on July 16, 2015 reflecting additional facts unearthed through Hausfeld’s investigation to date.
The settlement agreements, which have not been broken down into the amounts individual banks will pay, are preliminary and need to be agreed by the district judge.
Hausfeld stated that the firm was also considering “concerted” action in London and Asia.
“While the recoveries here are tremendous, they are just the beginning,” he said.
“Investors around the world should take note of the significant recoveries secured in the United States and recognize that these settlements cover a fraction of the world’s largest financial market.”
Explaining the modus operandi, Hausfeld alleged that the traders used their banks’ closed chat rooms, instant messaging systems and emails to manipulate prices.
In keeping with the spate of market rigging cases involving the banks, traders assumed names such as “The Cartel,” “The Bandits’ Club,” and “The Mafia” to communicate and place confidential orders.
Many of the world’s leading banks have paid hefty fines for fixing rates in the $8.6 trillion a day currency trading markets.
In May, US and UK regulators had fined six major banks $6 billion for rigging the foreign exchange market and Libor interest rates.
