Major banks fail to have Forex manipulation complaint against them dismissed

Maria Nikolova

Judge Lorna G Schofield of the New York Southern District Court denied the banks’ motion to dismiss the third amended complaint in a Forex benchmark rate fixing case.

Some of the world’s major banks like JPMorgan Chase & Co. (NYSE:JPM), Citigroup Inc (NYSE:C), Bank of America Corp (NYSE:BAC), and HSBC, have failed to have a Forex manipulation complaint against them dismissed, as Judge Lorna G Schofield of the New York Southern District Court sided with the plaintiffs in the case captioned Nypl v. JP Morgan Chase & Co. et al (1:15-cv-09300).

On Monday, March 12, 2018, Judge Schofield issued an Order which denies the Motion to Dismiss launched by the defendants in this case.

The 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.

In the Judge’s Order, seen by FinanceFeeds, the Judge finds that the plaintiffs’ third amended complaint sufficiently pleads antitrust injury because it alleges facts supporting a reasonable inference that the foreign currency consumer retail market in which the plaintiffs participated was directly restrained by the banks’ alleged manipulation of FX benchmark rates.

Specifically, Plaintiffs allege that they “purchased price-fixed foreign currency from Defendants at the Benchmark exchange rates, derived from spot trading, plus a small commission.” The Court finds that the defendants’ contrary arguments in this motion are unpersuasive.

The single win for the banks on Monday was with regard to the scope of the case. The defendants have asserted that the scope of claims in the plaintiffs’ complaint should be narrowed because it alleges no conduct after January 2013. The Court agreed in part.

The Court ruled that because the complaint contains no specific allegations of conspiratorial activity after 2013 and the attached documents suggest that the conspiracy ended in 2013 at the latest, the plaintiffs’ claims extending after December 31, 2013, are dismissed.

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