DOJ seeks to preserve stay for “select witnesses” in FX benchmark fixing case

Maria Nikolova

The Department requests that the discovery stay remain in place with respect to former currency traders Jason Katz, Christopher Cummins, and Nicholas Williams.

Shortly after the plaintiffs in a Forex benchmark rate fixing case targeting some of the world’s biggest banks asked to lift the discovery stay in the action, the Department of Justice (DOJ) has made clear its stance on the matter.

Let’s note that the action, captioned Nypl v. JP Morgan Chase & Co. et al (1:15-cv-09300), is brought on behalf of a putative class of consumers and end-user businesses alleging that they paid inflated foreign currency exchange 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 lawsuit targets major banks like JPMorgan Chase & Co. (NYSE:JPM), JPMorgan Chase Bank, N.A., Barclays Capital, Inc., Citibank, N.A., Citigroup Inc (NYSE:C), Bank of America Corp (NYSE:BAC), Bank of America, N.A, HSBC Bank USA, N.A., HSBC North America Holdings, Inc, The Royal Bank of Scotland plc (now known as NatWest Markets plc), and UBS AG.

The Department of Justice has sought and secured numerous extensions of the discovery stay in this lawsuit. In November 2019, the plaintiffs filed a motion with the New York Southern District Court to lift the stay as the last case which has been delaying the testamentary discovery has resulted in a guilty verdict. The case is the one against Akshay Aiyer, a former JP Morgan Forex trader. Aiyer was convicted of conspiring to fix prices and rig bids in Central and Eastern European, Middle Eastern and African (CEEMEA) currencies, which were generally traded against the USD and the EUR, from at least October 2010 through at least January 2013.

The plaintiffs in the Nypl case argued that this is the last trial of the Department of Justice (DOJ) concerning the price-fixing of the currency exchange rates, hence, they asked for bringing the stay to an end.

Earlier today, the DOJ has filed its response to the plaintiffs’ request with the Court. The document states:

“At this point, the Department requests that the stay remain in place for only a few select witnesses related to Aiyer and United States v. Johnson, 18-1503-cr. The Department requests that the stay remain in place with respect to Frank Cahill and Serge Sarramegna until the Second Circuit rules on Defendant Johnson’s petition for rehearing en banc. The Department requests that the stay remain in place with respect to Jason Katz, Christopher Cummins, and Nicholas Williams until Aiyer, Katz, and Cummins are sentenced”.

This means that the Government wants to prevent the plaintiffs from taking depositions of several witnesses including Jason Katz (a former currency trader at Barclays and BNP Paribas), Christopher Cummins ( a former currency trader at Citi), and Nicholas “Nic” Williams (also a former trader).

If the Court agrees to lift the stay, the plaintiffs will finally be able to take the depositions of a number of senior executives of HSBC, UBS, Barclays, Citi, JPMorgan and NatWest.

Under the terms of the stay granted in June 2018, 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 are said to agree with the DOJ’s request.

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