Alpari (US) forecasts Last Look class-wide damages to be in “the hundreds of millions of dollars”

Maria Nikolova

Analogically to the claims made against Citi, Alpari (US) alleges that RBS, Goldman Sachs, Morgan Stanley, Credit Suisse and BNP Paribas caused massive damage to hundreds of Forex market participants via the Last Look practice.

Further to FinanceFeeds’ article from last week about Alpari (US) LLC launching a case against Citigroup over Last Look practices, we have sought to examine the other complaints that the broker, which is now defunct, has filed against five other major banks and their US subsidiaries. According to data from the New York Southern District Court, where the case against Citi was filed, there are at least five other “Last Look” cases filed by Alpari (US) last week.

The list of defendants includes:

  • Royal Bank of Scotland Group PLC (NYSE:RBS) and RBS Securities, Inc.
  • Goldman Sachs Group Inc (NYSE:GS) and Goldman, Sachs & Co.
  • Credit Suisse Group AG (VTX:CSGN), Credit Suisse AG, and Credit Suisse Securities (USA), LLC.
  • Morgan Stanley (NYSE:MS), Morgan Stanley & Co., LLC, and Morgan Stanley & Co. International plc.
  • BNP Paribas SA (EPA:BNP).

All of the defendants are alleged to have caused damage to Alpari (US) and other FX market participants due to the Last Look practices. All of the defendants are accused of breach of contracts on their proprietary trading platforms, breach of contracts on ECNs, as well as of unjust enrichment.

The allegations, of course, concern different class action periods and platforms, depending on the defendant:

  • RBS

RBS is alleged to have first used this intentional delay (Last Look), on Currenex and RBSTrade at least as early as January 1, 2008, and on RBSMarketplace beginning with its launch in 2008. On RBS Marketplace, RBS is said to have further applied Last Look to all API/FIX and ECN trades, as well as a portion of those customers using RBS’s GUI.

  • Goldman Sachs

Goldman Sachs is alleged to have first used this intentional delay, its Last Look, on Redi FX when it was launched in February 2008, and on Marquee Trader when it was launched in 2013. On Redi FX and Marquee Trader, Goldman Sachs is said to have further applied Last Look to all API/FIX and ECN trades, as well as a portion of those customers using Goldman Sachs’s GUI.

  • Credit Suisse

Credit Suisse is alleged to have first implemented this intentional delay, its Last Look, on PrimeTrade no later than January 1, 2008. On PrimeTrade and Credit Suisse Plus, and the rest of Credit Suisse proprietary platforms, Credit Suisse is said to have further applied Last Look to all API/FIX and ECN trades, as well as a portion of those customers using Credit Suisse’s GUI.

  • Morgan Stanley

According to the allegations, Morgan Stanley first used this intentional delay, its Last Look, on Matrix at least as early as 2009, and on Currenex as early as January 1, 2008. On Matrix, Morgan Stanley further applied Last Look to all API/FIX and ECN trades, as well as a portion of those customers using Morgan Stanley’s GUI.

  • BNP Paribas

BNP Paribas is alleged to have first implemented this intentional delay (Last Look), through Currenex no later than 2008, on FX e-Trader in 2009, and on Cortex in 2012. On BNP Paribas proprietary platforms, BNP Paribas further applied Last Look to all API/FIX and ECN trades, as well as a portion of those customers using BNP Paribas’ GUI.

  • ECNs

The complaints against the five banks in question repeat the statement about ECNs being held as hostages by some of their liquidity providers.

Some ECNs have granted or continue to grant RBS last-look privileges, including the ability to renege on matched orders and these are Currenex, FXall, and 360T, according to the complaint.

The same ECNs are alleged to be granting last-look privileges, including the ability to renege on matched orders to Morgan Stanley too. Currenex is alleged to be the ECN granting such privileges to BNP Paribas.

Notably, the complaints stress that when Liquidity Providers trade directly with each other on multi-dealer platforms such as Reuters Matching and EBS Market, they do not use Last Look.

  • The Money

In all of the cases, the plaintiffs request that the Court “award Plaintiff and Class members damages, punitive damages, and/or restitution in an amount to be determined at trial”. Although the precise amount of damages is not known, the Plaintiff – Alpari (US), expects that class- wide damages will be in the hundreds of millions of dollars.

Importantly, the lawyers for the plaintiffs have filed Statements of Relatedness of all six cases against the bank to case# 13-cv-7789, which is a Foreign Exchange Benchmark Rates Antitrust Litigation, involving at least 43 parties.

The cases against Citi, BNP Paribas, Goldman Sachs, Morgan Stanley, Credit Suisse and Royal Bank of Scotland continue at the New York Southern District Court. At this stage, summonses are requested and issued.

FinanceFeeds’ article on Alpari (US) LLC action against Citi, as well as Andrew Saks-McLeod’s Op Ed on it have drawn substantial feedback from our readers. An expert opinion on the topic can be viewed here .

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