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Forex Rigging Class Action Lawsuit Overview:
- Who: The Competition Appeal Tribunal rejected a U.S.-style class action lawsuit status for a case alleging major banks engaged in foreign exchange rigging.
- Why: The majority determined that opt-in status was more appropriate for the proposed forex class action lawsuit.
- Where: The Competition Appeal Tribunal is in London.
London’s Competition Appeal Tribunal has determined that a proposed billion-pound case against major banks could not proceed as a U.S.-style class action lawsuit that would allow putative class members to opt out of the litigation.
The proposed class action lawsuit was brought on behalf of asset managers, financial institutions and pension funds over allegations banks engaged in foreign exchange, or forex, rigging. The banks accused of forex rigging include JPMorgan, Citigroup, Barclays, UBS and NatWest.
In 2019, the European Commission fined banks more than 1 billion euros for their role in two forex cartels between 2007 and 2013.
Michael O’Higgins, the former chairman of the watchdog group The Pensions Regulator, and Phillip Evans, a former inquiry chair at the Competition Markets Authority, sought to pursue a class action lawsuit on behalf of financial organizations.
“This decision is extremely disappointing because this claim is exactly the sort of claim that opt-out proceedings were introduced to facilitate in order to provide access to justice to all entities affected by the illegal behaviour of cartelists,” O’Higgins said.
He noted that his team would continue to review their options to determine the best way to serve the affected financial entities.
Competition Appeal Tribunal Will Allow Proposed Forex Class Action to Be Amended
The Competition Appeal Tribunal has given O’Higgins and Evans three months to amend their proposed forex class action lawsuit to one that allows class members to opt-in to the case. The majority determined that opt-in was the better option given the weaknesses of the case and the potential pressures for a settlement that an opt-out class action may pose.
The minority disagreed with the majority’s decision and would have allowed the case to proceed as an opt-out class action lawsuit.
European Commission Fined Major Banks Over Forex Collusion
Last year, the European Commission fined four major banks a total of €344 million over their reported forex trading collusion. Barclays, Royal Bank of Scotland, HSBC and Credit Suisse received fines, but United Bank of Switzerland received full immunity because of its role in outing the forex collusion.
Forex traders at the five major banks reportedly exchanged information and coordinated trades in violation of EU competition law.
Do you think the financial entities should be able to pursue their forex rigging case as a U.S.-style class action lawsuit that would allow potential class members to opt out? Join the discussion in the comments below!
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