NY Court approves another stay extension in FX benchmark rate fixing case

Maria Nikolova

The testamentary discovery stay is extended for a period of more than three months in the face of the plaintiffs’ opposition.

The plaintiffs in a Forex benchmark rate fixing lawsuit targeting some of the world’s major banks were dealt a bitter blow on Thursday, as Judge Lorna G. Schofield of the New York Southern District Court granted another extension of the discovery stay in the case.

The Judge ordered that the testamentary discovery stay is extended through the conclusion of the trial in United States v. Aiyer, No. 18 Cr. 333, currently scheduled for October 21, 2019. On November 1, 2019, the Department of Justice is set to file a letter apprising the Court of the status of the trial in Aiyer.

Let’s recall that, a couple of weeks ago, the DOJ requested a three-month extension of the limited discovery stay of certain depositions and interviews in the matter. The Department said that the stay was necessary given the upcoming trial and appeal in two FX-related cases:

  • United States v. Aiyer, 18-cr-333, is set for trial before Judge Koeltl of the Southern District of New York on October 21, 2019.
  • United States v. Johnson, 18-1503-cr, is on appeal to the Second Circuit. The case is fully briefed and was argued on May 31, 2019.

In their response filed on Wednesday, the plaintiffs – 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, argued the stay extension should not be granted.

The plaintiffs note that this was the tenth piecemeal stay sought by the DOJ in this case. According to the plaintiffs, these stays make it very difficult, if not impossible, for them to plan, manage, schedule, or prepare their case against the defendants. According to the plaintiffs, the prejudice to them has been manifest, and indeed used against them implying that the stays have delayed the prosecution of their case.

The Judge, apparently, sided with the DOJ.

The lawsuit targets major 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., HSBC North America Holdings, Inc, The Royal Bank of Scotland plc (now known as NatWest Markets plc), and UBS AG. The case has been 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.

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