Major banks oppose attempt by plaintiffs in FX benchmark rate fixing case to amend complaint

Maria Nikolova

The banks oppose the plaintiffs’ attempt to expand the scope of the case to include new claims arising out of the plaintiffs’ overseas credit card, debit card, and ATM transactions.

Major banks targeted in a Forex benchmark rate rigging lawsuit have sought to dismiss an attempt by the plaintiffs to expand the scope of the case.

The lawsuit is brought by Go Everywhere, Inc., Valarie Jolly, Mad Travel, Inc., Lisa McCarthy, John Nypl, and William Rubinsohn. The plaintiffs represent a putative class of consumers and end-user businesses who allege 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 have tried several times to amend their complaint to enlarge the scope of the definition of “foreign currency retail transactions”. According to the plaintiffs, “foreign currency retail transactions” should include transactions other than those involving foreign currency purchased with USD and physically received at the defendant banks’ retail branches within the United States, including credit and debit card transactions and ATM cash withdrawals abroad.

The latest attempt by the plaintiffs to do so is from May this year.

The defendant banks, however, disagree. On Friday, June 7, 2019, they filed a Letter with the New York Southern District Court. The Letter is signed by attorneys for all defendants, including 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 defendants note that this is the plaintiffs’ fourth attempt over the course of a year and a half to vastly expand the scope of their case to include new claims arising out of the plaintiffs’ overseas credit card, debit card, and ATM transactions. According to the banks, the plaintiffs’ fourth attempt should be denied.

The defendants stress that, even if the Court were to find that the plaintiffs’ proposed amendments are not time-barred, leave to amend should nonetheless be denied as futile.

The defendant banks note that users of credit, debit, and ATM cards are not efficient enforcers of the antitrust laws for the alleged manipulation in the FX spot markets. They also note that the plaintiffs’ complaint does not allege that individuals who engaged in credit, debit, and ATM card transactions are direct purchasers of foreign currency. Further, according to the banks, the plaintiffs’ allegations about their credit, debit, and ATM card transactions fail to meet the due process requirements for bringing claims under the Cartwright Act. Finally, the banks argue that the plaintiffs’ claims regarding wire transfers are conclusory and time-barred.

Let’s recall that the previous attempt by the plaintiffs to amend their complaint so as to include the expanded definition of “foreign currency retail transactions” was nixed by Judge Lorna G. Schofield on May 20, 2019. The Judge said the motion to amend was futile where “the claims the plaintiff [seeks] to add would be barred by the applicable statute of limitations”.

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