DOJ requests further discovery stay extension in Forex benchmark rate manipulation lawsuit

Maria Nikolova

The Department of Justice wants a three-month extension of the discovery stay in a lawsuit targeting banks like HSBC, Citi and JPMorgan.

The United States Department of Justice (DOJ) is seeking further extension to the discovery stay in a Forex benchmark rate manipulation lawsuit targeting top banks like HSBC, Citi and JPMorgan. On December 13, 2018, the DOJ filed a Letter with the New York Southern District Court requesting a three-month extension of the limited discovery stay of certain depositions and interviews in the matter.

According to the Department, the stay is necessary given the upcoming trials and appeals in three FX-related cases:

• United States v. Bogucki, 18-cr-21,at the Northern District of California.

• United States v. Aiyer, 18-cr-333, at the Southern District of New York.

• United States v. Johnson, 18-1503-cr, is on appeal to the Second Circuit.

The DOJ says that the scope of the stay appropriately balances the need to protect the integrity of ongoing cases with the plaintiffs’ desire for testimonial discovery at this juncture of the civil cases.

However, the plaintiffs in this Forex benchmark rate manipulation lawsuit oppose the Department’s request.

The lawsuit, captioned Nypl v. JP Morgan Chase & Co. et al (1:15-cv-09300), was brought on behalf of a putative class of consumers and end-user businesses alleging that they paid inflated Forex rates caused by an alleged conspiracy among the defendant banks to fix prices of FX benchmark rates in violation of Section 1 of the Sherman Antitrust Act, 15 U.S.C. sec. 1 et seq.

The plaintiffs had previously opposed the DOJ’s requests for extensions of the discovery but the Court had sided with the DOJ.

Let’s recall that, under the terms of the stay granted in June, depositions and interviews of current and former employees of Citibank, JPMorgan Chase, Barclays, RBS, UBS, BNP Paribas, and HSBC, are stayed. The stay bars depositions of signatories to the May 2015 corporate plea agreements, which plaintiff counsel in the case at hand has proposed to take.

The plaintiffs argued that this would be yet another stay that continues a palpable prejudice inflicted upon the victims of the banks and these victims’ efforts to recover what was stolen from them. This is especially so, they said, since an integral part of the Plea Agreements and Deferred Prosecution Agreement provide that the civil actions are to be the means used to satisfy the requirements of Restitution.

“The piecemeal stays sought by the Department and granted by this Court have extended over a period of over two years. Some of those signatories are no longer employees of the defendants. The Nypl Plaintiffs fear pretentions of amnesia as it is. The request by the Department would only contribute to that kind of proclivity”, the plaintiffs said back in September.

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