NY Court agrees with major banks on definition of “foreign currency retail transactions”

Maria Nikolova

Judge Lorna G. Schofield agreed with defendant banks that the definition includes only transactions involving foreign currency purchased with USD and physically received at the banks’ retail branches within the US.

Judge Lorna G. Schofield of the New York Southern District Court has once again sided with a number of major banks over the definition of “foreign currency retail transactions”. On Thursday, September 6th, the Judge issued an order denying the plaintiffs’ motion for reconsideration of the Court’s earlier decision which supported the banks’ stance on what the definition of “foreign currency retail transactions” covers.

Let’s recall that this is a Forex benchmark rate fixing case targeting top 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., and HSBC North America Holdings, Inc.

The plaintiffs in the lawsuit – including Go Everywhere, Inc., Valarie Jolly, Mad Travel, Inc., Lisa McCarthy, John Nypl, and William Rubinsohn, had to explain the basis for their position that the term “foreign currency retail transactions” in this case 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.

In explaining her decision that denied the plaintiffs’ motion for reconsideration, Judge Lorna G. Schofield noted that the plaintiffs fail to identify an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice. The latter factors are crucial for granting a motion for reconsideration.

Furthermore, according to Judge Schofield, the plaintiffs seek reconsideration of the Court’s earlier decision to reject plaintiffs’ interpretation of the term “foreign currency retail transactions” by restating and expanding on arguments made in their initial motion, which the Court already rejected. The plaintiffs principally reargue their contention that references to the word “purchase” in the third amended complaint include credit, debit and ATM card transactions. The Court rejected this argument, adopting the reasons stated in the defendant banks’ opposition.

The Judge notes that the plaintiffs also reargue their contentions that (1) exchange rates charged to Plaintiffs for credit, debit and ATM card transactions were based on wholesale benchmark rates; (2) Plaintiffs’ expert found a correlation between benchmark rates and rates used by Visa and MasterCard; and (3) Defendants advertised that wire transfers and credit, debit and ATM cards could be used abroad. But these arguments were rejected because none of them is relevant to the interpretation of the allegations of the third amended complaint, which include only the purchase of currency at retail branches in the United States.

The plaintiffs also tried to introduce new material, a “Federal Reserve Payments Study 2016,” to support their motion for reconsideration. This study, however, does not provide a basis for reconsideration, the Judge says, as it has nothing to do with the third amended complaint or foreign exchange transactions, and merely identifies “trends in noncash payments in the United States.”

The case is captioned Nypl v. JP Morgan Chase & Co. et al (1:15-cv-09300).

Read this next

Retail FX

ThinkMarkets expands CFDs lineup to over 4000 ETFs and shares

ThinkMarkets has expanded its service offering by incorporating 2500 new CFDs on shares and ETFs on its ThinkTrader platform.

Retail FX

France regulator warns investors of Omega Pro, Businessempire.fr

France’s financial markets regulator alerted investors that scams related to Omega Pro Ltd are beginning to circulate, with the blacklisted firm capitalizing on the situation to run a range of “unrealistic” offers.

Digital Assets

Web3 platform Grand Time paid $2 million in token earnings to date

Community-driven Web3 platform Grand Time said its offering – which includes a multifaceted platforms and its native token – has been gaining significant traction highlighted by impressive operational metrics.

Institutional FX

FX volumes at MOEX halved in April as ruble gains gorund

Currency trading at Moscow Exchange (MOEX) halted its upward route in April as monthly volumes nearly halved from a month earlier.

Digital Assets

FTX US adds stock trading, fractional shares to crypto platform

FTX US, the American subsidiary of crypto exchange FTX has kicked off stock trading feature to its customers in an effort to compete with popular platforms such as Robinhood and eToro.

Industry News

UK FCA empowered to remove brokers’ permissions in 28 days

Businesses with permissions they don’t need or use, risk misleading consumers. These new powers will enable us to take quicker action to cancel permissions that are not used or needed.

Industry News

CFTC charges $44m Ponzi scheme but millions may have fled to foreign crypto exchange

The CFTC alleged that defendants transferred millions of dollars to an off-shore entity that, in turn, may have transferred funds to a foreign cryptocurrency exchange. None of these funds were returned to the pool.


Saxo Bank deploys Adenza to address Basel and EBA requirements

The integration of ControllerView will enhance Basel-driven capital calculations and reporting at Saxo Bank in support of the bank’s multijurisdictional capital and liquidity reporting requirements throughout Denmark, Switzerland and UK, with plans to expand into the Netherlands.

Executive Moves

ComplySci appoints CTO, CPO, and CLO to further regtech’s product expansion

ComplySci offers compliance software used by more than 1400 global institutions to identify risk and address regulatory compliance challenges.