Citi, JPMorgan, UBS face Australia forex cartel class action

Citigroup, the Royal Bank of Scotland Group and JPMorgan Chase & Co. are among five banks named in a class action lawsuit in Australia seeking damages for colluding on foreign-exchange trading strategies.

UBS Group and Barclays were also named in the suit lodged Monday in the Federal Court by Maurice Blackburn Lawyers. The action claims the banks colluded to rig foreign exchange rates, boosting profits at the expense of Australian businesses and investors, the law firm said in a statement.

Spokespeople at Citi and JPMorgan in Sydney and Barclays in Hong Kong had no immediate comment on the suit. UBS didn’t return a call seeking comment. RBS didn’t immediately respond to an inquiry outside of regular business hours in London, where it is a public holiday.

Citi, RBS, JPMorgan and Barclays were among five lenders that agreed to pay European Union fines totaling €1.07bn earlier this month for colluding on foreign exchange strategies. UBS escaped a fine because it was the first to tell regulators about the collusion.

Traders allegedly used chat rooms bearing names such as “The Cartel,” “The Bandits’ Club,” and “The Mafia,” and communicated directly with each other to coordinate the manipulation of FX benchmark rates, control the pricing of spreads and to trigger client stop-loss orders and limit orders, Maurice Blackburn said.

The manipulation of benchmark foreign-exchange rates was exposed in 2013 via Bloomberg stories, triggering regulatory probes in the US, the UK and Switzerland. More than a dozen financial institutions have paid about $11.8bn in fines and penalties globally, with another $2.3bn spent to compensate customers and investors.

While the US has won guilty pleas from JPMorgan, Citigroup, RBS and Barclays, three British traders in the group known as “The Cartel” were acquitted by a US federal court last year of using a chatroom to coordinate trades and manipulate prices on the spot exchange rate for euros and US dollars.

Maurice Blackburn’s suit claims Australian companies and investors, including importers, exporters, institutional investors and businesses with overseas operations have been affected by the distortion of currency markets by the five banks. The action is on behalf of customers who bought or sold more than A$500 000 ($347 000) of foreign currency between January 1 2008, and October 15, 2013, the law firm said.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
ZAR/USD
16.46
(+0.21)
ZAR/GBP
21.33
(+0.24)
ZAR/EUR
19.48
(-0.22)
ZAR/AUD
11.61
(+0.34)
ZAR/JPY
0.16
(+0.28)
Gold
1907.17
(+0.24)
Silver
24.62
(+5.30)
Platinum
872.00
(+2.22)
Brent Crude
42.85
(-0.67)
Palladium
2405.00
(+3.19)
All Share
55271.75
(+0.20)
Top 40
50851.62
(+0.22)
Financial 15
9956.35
(-0.22)
Industrial 25
75567.07
(+1.08)
Resource 10
53788.16
(-0.63)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
Yes, and I've gotten it.
32% - 19 votes
No, I did not.
43% - 26 votes
My landlord refused
25% - 15 votes
Vote