Five Major Banks Face UK Class Action in FX Rigging Case

The class action, estimated to be worth more than $1.2bn for trades executed in the UK, follows a similar-size fine levied against the banks by the European Commission in May.

Citigroup, Barclays, RBS, JP Morgan and UBS are facing a class action lawsuit in the UK for colluding to rig the forex market, Reuters reports.

The lawsuit follows a EUR 1.07 billion (USD 1.2 billion) fine issued by the European Commission in May, the result of a five-year investigation that uncovered 9 individual traders who were exchanging sensitive information and trading plans, and occasionally coordinated their trading strategies through online professional chatrooms.

The European Commission had fined Citigroup, Barclays, RBS and JP Morgan, as well as MUFG, but not UBS – which had reported the existence of collusion by the other banks.

The lawsuit was filed by US law firm Scott + Scott at the UK Competition Appeal Tribunal, seeking over GBP 1 billion (USD 1.22 billion) in compensation for investors and companies allegedly damaged by the banks’ actions.

Under a 2015 law change, the UK established opt-in collective legal actions similar to the class action suits filed in the US when the claimants are aggrieved in a similar way.

“Just as compensation has been won in the US, our legal action in the UK will seek to return hundreds of millions of pounds to pension funds and other corporates who were targeted by the cartel,” said Michael O’Higgins, the former chair of the UK Pensions Regulator, who is leading the claim.

The total value of the claim against the banks will depend on the number of forex trades executed in London for UK-domiciled units, and the proportional impact of rate rigging on these trades, O’Higgins told Reuters.

 

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