Plaintiffs in FX benchmark rate fixing case clarify motion for class certification

Maria Nikolova

This private antitrust case targets banks like JPMorgan, HSBC, Citi, Barclays and UBS that agreed “to eliminate competition in the purchase and sale of the EUR/USD currency pairs in the United States and elsewhere”.

While the disagreements around depositions in a Forex benchmark rate fixing case targeting major banks continue, the plaintiffs in the case have provided details on their proposed motion for class certification.

The lawsuit is a private antitrust case brought under Sections 4 and 16 of the Clayton Antitrust Act, 15 U.S.C. §§ 15, 26, alleging violation of Section of the 1 Sherman Antitrust Act, 15 U.S.C. § 1, in that it is alleged that the defendants, including banks like JPMorgan, HSBC, Citi, Barclays and UBS, agreed “to eliminate competition in the purchase and sale of the EUR/USD currency pairs in the United States and elsewhere”.

Each of the defendant banks confessed that they “eliminated competition in the purchase and sale of the EUR/USD currency pairs” and that their violations were in disregard of the law.

In a Letter, filed with the New York Southern District Court on February 7, 2020, the plaintiffs say that they are the representatives of the following designated class:

“All consumers and businesses in the United States who directly purchased supracompetitive foreign currency at Benchmark exchange rates from Defendants and their co-conspirators for their own end use at least since January 1, 2007 to [December 31, 2013]”.

The plaintiffs argue that their claims for class certification are compliant with the requirements.

For instance, Rule 23(a)(1) requires that “the class is so numerous that joinder of all members is impractical.” Transactional data produced in this action, the plaintiffs say, demonstrates that there are thousands of end-user class members, who purchased foreign currency “for their own end use”, so the numerosity criterion is satisfied.

The plaintiffs also note that their class definition corresponds with commonality requirements. Rule 23(a)(2) requires that “there are questions of law or fact common to the class.” According to the plaintiffs, the alleged violation of antitrust law is a common issue capable of class-wide resolution. Plaintiffs’ expert will present generalized class-wide proof that the defendant banks’ conspiracy to fix and manipulate benchmark exchange rates resulted in the plaintiffs and the class paying higher prices for foreign exchange than they would have paid but for the defendants’ conspiracy to fix and manipulate benchmark exchange rates. Plaintiffs’ expert will provide an analysis of causation by preparing a regression analysis that shows a statistically significant correlation between the spot fix rate and the end user rate.

Regarding typicality, the plaintiffs argue that each class member’s claims and injuries arise from a common overarching conspiracy to fix and manipulate FX benchmark exchange rates that resulted in a common antitrust injury that “the manipulated FX benchmark rates were the primary component of the prices Plaintiffs and the class paid for foreign currency in the consumer retail market.”

Read this next

Digital Assets

Revolut receives FCA’s go-ahead to launch crypto trading

British fintech and banking firm Revolut has received a regulatory go-ahead to launch its cryptocurrency services in the UK.

Digital Assets

GBTC share is trading at 36% below bitcoin spot price

Grayscale Bitcoin Trust share has widened its discount relative to the underlying cryptocurrency held in the fund, the highest margin ever since its debut in 2013. Digital Currency Group’s flagship GBTC shares traded at a discount of 35.8% to net asset value (NAV) today.

Digital Assets

Crypto lender Nexo investigated by 8 US state regulators

State securities regulators in New York, California, Kentucky, Maryland, Oklahoma, South Carolina, Washington and Vermont are investigating crypto lender Nexo for allegedly failing to register its Earn Interest Product.

Metaverse Gaming NFT

Astar Network’s ad features 329 top brands to support Web3 in Japan

Blockchain innovation hub Astar Network is making strides in promoting the Web3 adoption worldwide. In yet another milestone, the smart contracts platform has run a national newspaper ad in Japan that set a new global record with participation from 329 blue-chip firms.

Digital Assets

Pyth Network welcomes onchain data from crypto market maker Auros

“By sharing our high-frequency trading data with a truly onchain decentralized network, we aim to foster innovation that will lead to better financial solutions for all participants.”

Digital Assets

Tokeny integrates Ownera to boost liquidity of tokenized assets

“The adoption of FinP2P will result in higher liquidity and better access to capital and assets by providing regulated firms with one secure point of connection to multiple digital asset networks across the globe.”

Digital Assets

BingX launches subsidy vouchers to cover user losses in copy trading

“With the introduction of copy trade subsidy vouchers, new users can easily try out trading strategies without incurring losses.”

Digital Assets

Talos expands sales team: Frank van Zegveld, Matt Houston, Hillary Conley

“The extensive leadership and industry expertise of these new hires will enable us to build long-lasting relationships as we continue to build out our global presence in EMEA and beyond.”

Executive Moves

FX and CFD broker Emporium Capital hires industry veteran Robert Woolfe as COO

His past experience within the FX and CFD industry includes top roles at Capital Index, London Capital Group, GKFX, ETX Capital, and IG.  “I’m delighted to be part of the Emporium Capital team and spearheading the brokerages global expansion plans”, he said about the appointment.