DOJ wants to extend stay of Forex benchmark rate fixing case against major banks

Maria Nikolova

In yet another move to affect the proceedings against financial giants like HSBC, Citi and JPMorgan, the DOJ wants a five-month extension of the stay of the case.

The United States Department of Justice (DOJ) has once again sought to intervene in a Forex benchmark rate fixing case targeting major banks like HSBC, Citi and JPMorgan. On June 5, 2018, the US Government sent a Letter to Judge Lorna G. Schofield of the New York Southern District Court, requesting further extension of the stay of the discovery proceedings in the case.

Under the terms of the requested five-month stay, depositions and interviews of current and former employees of Citibank, JPMorgan Chase, Barclays, RBS, UBS, BNP Paribas, and HSBC, are stayed. Individuals who worked for any of the above-referenced seven banks only prior to the beginning of the class period (December 2007), however, may be deposed. For the avoidance of any doubt, this term of the proposed stay would bar, during the pendency of the stay, depositions of signatories to the May 2015 corporate plea agreements, which plaintiff counsel in the NYPL case has proposed to take.

The Department will consider one-off requests for depositions of individuals who are covered by the above stay terms.

The DOJ requests to extend the stay by five months, rather than the prior extension of three months, to allow the stay to continue through the trial of United States v. Usher, et al., 17-cr-19 (RMB), which is scheduled to begin on October 1, 2018 before Judge Berman in the New York Southern District Court. Let’s recall that this case targets former Forex traders Richard Usher, Rohan Ramchandani, and Christopher Ashton, also known as the FX Cartel or FX Mafia. The start of their trial has been recently rescheduled from June 4, 2018, to October 1, 2018. While there are other indicted cases that are relevant to the Department’s assessment of a stay, the DOJ believes that following the conclusion of the Usher trial, it may be in a position to narrow the stay.

The DOJ’s proposal for an extension of the stay has not been welcome. The plaintiffs in the case, captioned Nypl v. JP Morgan Chase & Co. et al (1:15-cv-09300), have already stated they would oppose the DOJ’s request.

The plaintiffs had previously indicated their intentions to take depositions from:

  • Stuart Alderoty, Esq., former Senior Executive Vice President and General Counsel, HSBC Bank USA, N.A.;
  • Marc Moses, Executive Director and Group Chief Risk Officer, HSBC Holdings plc;
  • James Fuqua, Esq., General Counsel, UBS Securities LLC, Investment Bank Americas;
  • Axel Weber, Chairman of the Board of Directors, UBS Group AG;
  • Matthew Fitzwater, Esq., Global Head of Litigation, Investigations, and Enforcement, Barclays PLC;
  • Rohan Weerasinghe, Esq., General Counsel and Corporate Secretary, Citigroup, Inc.;
  • Stephen Cutler, Esq., former General Counsel and current Vice Chairman, JPMorgan Chase & Co.;
  • James Esposito, Esq., Global General Counsel, NatWest Markets and General Counsel (Americas), Royal Bank of Scotland.

This action 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.

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