NY Court agrees to extend discovery stay in Forex benchmark rate fixing lawsuit

Maria Nikolova

Judge Lorna G. Schofield of the New York Southern District Court has dashed the hopes of the plaintiffs in the case targeting some of the world’s top banks by halting discovery again.

Soon after the plaintiffs in a Forex benchmark rate manipulation lawsuit opposed another attempt by the Department of Justice (DOJ) to stay the discovery proceedings, the Court has decided against their arguments and has agreed with the US authorities.

Judge Lorna G. Schofield of the New York Southern District Court has sided with the DOJ and now the discovery stay is extended to December 13, 2018. The DOJ may apply for an extension at that time if the stay continues to be necessary, the Court order says.

Earlier in September, the DOJ requested another extension of the discovery stay in the case targeting financial institutions like HSBC, Citi and JPMorgan.

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.

On Monday, September 24th, the plaintiffs in the case filed their opposition to the DOJ’s request with the New York Southern District Court.

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 say, 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 argued.

Apparently, the plaintiffs’ arguments were not convincing enough for the judge.

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.

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