Four major banks pay nearly US$1b to settle forex rigging suit, say sources

Barclays is one of four major banks which have reached separate agreements to settle a US civil lawsuit over alleged foreign-exchange rigging in deals totaling nearly US$1 billion.
Barclays is one of four major banks which have reached separate agreements to settle a US civil lawsuit over alleged foreign-exchange rigging in deals totaling nearly US$1 billion.PHOTO: AFP

NEW YORK (AFP) - Four major banks have reached separate agreements to settle a US civil lawsuit over alleged foreign-exchange rigging in deals totaling nearly US$1 billion (S$1.34 billion), sources close to the situation said Wednesday.

The agreements by Goldman Sachs, French bank BNP Paribas and British banks Barclays and HSBC are preliminary and could change, the sources said, confirming a report on the settlements in The Wall Street Journal that cited people familiar with the matter.

The four banks' pending agreements would settle the civil lawsuit filed by Scott & Scott and Hausfeld that alleges their traders manipulated the forex market to boost the banks' profits.

According to the sources, Barclays will pay US$375 million, HSBC US$285 million, BNP Paribas nearly US$100 million and Goldman Sachs about US$130 million. Combined, the settlements total about US$890 million.

None of the banks has admitted to the alleged rigging of the US$5.3 trillion currency market, the sources said.

The deal is subject to approval by US authorities, notably by US District Judge Lorna Schofield in New York, in whose court the lawsuit was filed. A hearing is scheduled on June 25 at 2000 GMT, according to court documents reviewed Wednesday by AFP.

The four banks' position in the case was weakened last month by nearly US$6 billion in fines ordered by US and British regulators from six major banks - Barclays, JPMorgan Chase, Citicorp, Royal Bank of Scotland, UBS and Bank of America - for rigging foreign exchange market and Libor interest rates.

Barclays, JPMorgan Chase, Citicorp and the Royal Bank of Scotland all pleaded guilty to US Justice Department charges of conspiring to manipulate the massive currency market.

Switzerland's UBS meanwhile pleaded guilty to violating a prior settlement of charges for rigging the Libor interest rate. And Bank of America was included with the other five banks in fines levied by the US Federal Reserve in the forex rigging case.