NY Court sides with DOJ over stay in Forex benchmark rate manipulation lawsuit

The discovery stay in a Forex benchmark rate manipulation lawsuit targeting major banks like Citi, HSBC and JPMorgan has been extended, as per an order by the New York Southern District Court.

On Thursday, December 20, 2018, Judge Lorna G. Schofield issued an order granting the request by the Department of Justice. Thus, the testamentary discovery stay is extended to March 25, 2019. The Judge was, apparently, unimpressed with the objections voiced by the plaintiffs in the case. They had stressed that the continuance of the stay had already been almost two years.

The case, 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.

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.

According to the Department, the stay is necessary given the upcoming trials and appeals in three FX-related cases:

• United States v. Bogucki, 18-cr-21,at the Northern District of California.

• United States v. Aiyer, 18-cr-333, at the Southern District of New York.

• United States v. Johnson, 18-1503-cr, is on appeal to the Second Circuit.

The DOJ says that the scope of the stay appropriately balances the need to protect the integrity of ongoing cases with the plaintiffs’ desire for testimonial discovery at this juncture of the civil cases.