Banks to face more suits over forex rigging

LONDON • Global banks are facing a threat of lawsuits worth billions of dollars in Europe and Asia, including Singapore, following a landmark settlement in New York over rigging in currency markets.

Four currency traders sued their former employer Citigroup in a London court yesterday in connection with the rigging case, claiming unfair dismissal.

At least 30 others at a number of banks were fired, suspended or put on leave in the past two years after it emerged that the world's biggest lenders had attempted to collude in rigging currency benchmarks, Bloomberg reported.

Banks have paid out more than US$10 billion (S$14 billion) in fines over the scandal, with criminal investigations in the US and Britain still active.

Barclays, Goldman Sachs, HSBC and Royal Bank of Scotland were among nine banks revealed last Friday to have agreed a US$2 billion settlement with thousands of investors hit by rate-rigging in a New York court case, Financial Times reported.

Lawyers warned the victory opens the floodgates for an even greater number of claims in London, the largest foreign exchange trading hub in the world.

Investors are expected to bring cases in Hong Kong and Singapore, two of the largest foreign exchange markets in Asia, said the FT report.

Bank of America, Citi, BNP Paribas, JPMorgan and UBS were among the nine banks that opted for a settlement. A further seven continue to face litigation in the US from investors over alleged foreign exchange manipulation, including Deutsche Bank, Morgan Stanley and Standard Chartered.

US investors had alleged that the world's largest financial institutions conspired to manipulate the foreign exchange market as far back as 2003. The conspiracy affected dozens of pairs - the value of one currency versus another - including seven pairs with the highest market volume.

Aside from cases brought by investors, global banks have been hit with penalties from regulators for rate-rigging misconduct. Last November, six banks paid US$4.3 billion in fines to regulators in Britain and Switzerland.

"London has been and will continue to be a very attractive jurisdiction for claims," said Mr Edward Coulson of Hausfeld - an American firm which worked on the lawsuit in the United States.

"The US settlement covers mainly US investors: (But) London is about 40 per cent of the forex market, so there are a lot of other investors."

Bankers Carly McWilliams, Perry Stimpson, David Madaras and Robert Hoodless - who are suing Citigroup - have hearings scheduled between August and November, a court spokesman said.

The currency probe came shortly after the industry was rocked by another rate rigging scandal, which also saw traders sue their employers for firing them without due course.

Two former Royal Bank of Scotland Group traders settled employment tribunal cases in London.

A version of this article appeared in the print edition of The Straits Times on August 19, 2015, with the headline 'Banks to face more suits over forex rigging'. Print Edition | Subscribe