Plaintiffs in Forex manipulation case seek help from UK judicial authorities

Maria Nikolova

The plaintiffs in a US case targeting major banks want the judicial authorities of England to help them obtain the testimony of Matthew Gardiner.

Plaintiffs in a US lawsuit targeting some of the world’s major banks like Barclays PLC, Citigroup Inc., HSBC and JPMorgan Chase & Co. are seeking the assistance of UK judicial authorities in order to obtain testimony from Matthew Gardiner, a former employee of several of the defendants in the lawsuit.

On April 10, 2019, the plaintiffs submitted a raft of documents with the New York Southern District Court moving the Court to request the assistance of UK authorities. The request for assistance is said to be made made pursuant to Chapter I of the Hague Convention of 18 March 1970 on the Taking of Evidence in Civil or Commercial Matters.

Let’s note that the action involves claims of a conspiracy to violate the antitrust laws of the United States. Mr Gardiner is a former employee of at least three of the defendant banks in this action, Barclays, UBS, and Citicorp. In his employment at each defendant, Mr. Gardiner served as a Foreign Exchange trader in G10 currencies at Barclays,UBS, and Citicorp in New York and in London. He is said to have knowledge relevant to this action. Gardiner, a non-party to the US action, resides in the United Kingdom.

The case in question involves claims based on an alleged conspiracy among banks, including Barclays, UBS, and Standard Chartered, to fix prices in the FX market in violation of the Sherman Antitrust Act, 15 U.S.C. §§1. The plaintiffs – John Nypl, Lisa McCarthy, Mad Travel, Inc. a.k.a. Travel Leaders; Valarie Jolly, Go Everywhere, Inc., William Rubinsohn, rubinsohn Travel, Inc. on behalf of themselves and those similarly situated, seek damages and other relief for injury caused by the defendants’ wrongdoing. The plaintiffs allege, inter alia, that the defendant banks, including Barclays, UBS, and Citicorp conspired to fix FX prices and otherwise manipulate the FX market from a period beginning at least as early as January 1, 2007 through December 31, 2013, in violation of U.S. antitrust and commodities exchange laws.

The plaintiffs allege that the defendants used electronic chat rooms with names such as “The Cartel,” “The Bandits’ Club,” and “The Mafia” in furtherance of the conspiracy. Further, the plaintiffs allege that over time, various chat rooms evolved to discuss numerous currency pairs beyond those for which they were originally established. The plaintiffs claim that they purchased foreign currency at prices that were inflated by the defendants’ conspiracy and agreement to fix prices. The defendants deny they entered into any agreement to fix prices or otherwise manipulate the FX market.

The plaintiffs ask the New York Southern District Court to request that appropriate judicial authority in England cause the appropriate orders to be issued to direct the deposition, under oath, of Mr. Mathew Gardiner to be used at trial in these proceedings.

According to the plaintiffs, Mr. Gardiner’s testimony regarding his knowledge of the FX market is relevant to establishing the existence of conspiracy and market manipulation. In addition, Mr. Gardiner’s testimony regarding his knowledge of communications with each codefendant from 2007 through 2013, including in multi-bank chat rooms, is relevant to prove conspiracy.

Also, according to the plaintiffs, beginning as early as 2007 and continuing through at least 2013, Mr. Gardiner was an active participant in multibank chat rooms with FX traders of the defendant banks. Mr. Gardiner’s testimony regarding his chat room communications is seen as relevant to explain at trial, numerous multi-bank chats in which he participated because FX traders have their own unique jargon and codes that are difficult to interpret.

Moreover, Mr. Gardiner’s testimony regarding his knowledge of compliance issues is said to be relevant for trial because the plaintiffs intend to prove either that the defendant banks lacked compliance measures to prevent the conspiracy and/or knew of violations of compliance policies and failed to prevent them.

The plaintiffs seek that the judicial authority in England permit the examination of Mr. Gardiner to be conducted by attorneys for the plaintiffs or other duly authorized Representatives, qualified to practice law in United States jurisdictions and/or in England and Wales, nominated by the plaintiffs, and that the plaintiffs be permitted to cross-examine Mr. Gardiner.

Read this next

Digital Assets

Ramp launches FCA-approved off-ramp product, onboards Brave, Trust Wallet, Ledger

“To obtain and maintain our FCA registration, we must meet and operate within their strict anti-money laundering and counter-terrorist financing standards. This is a huge achievement for us, as compliance is a cornerstone of our business and what we stand for.”

Institutional FX

State Street launches FIX API for Fund Connect ETF platform

“Expanding from proprietary APIs to the FIX industry standard will bring us closer to our goal of 100% digital interactions. This is another example of innovations we’ve brought to our operating model as we celebrate 30 years of servicing ETFs since the launch of SPY.”

Industry News

HollyWally opens office in Portugal to bring B2B2C wallet-as-a-service platform to Europe

“We looked at a number of centers for startups throughout Europe and were attracted straight away to Lisbon. There is great Government support and enthusiasm for startups, it’s well positioned between our Asian and US offices, it’s a cost-effective city in which to base a fintech and it’s a beautiful place.”

Retail FX

Eightcap integrates Acuity’s economic calendar for trade ideas on MT4 or MT5

“By incorporating Acuity’s cutting-edge AI technology into our platform, we are able to offer our clients a powerful new tool that will help them stay ahead of the markets. We are committed to providing an extensive range of tools and educational resources that will enhance our clients’ trading experience and allow them to trade smarter.”

Inside View

Private Equity Renaissance

Recent years have seen a resurgence in the concept of trading physical equities, with a slew of new arrivals joining the market for what is arguably one of the oldest forms of investing. But what has been the driving force behind this change in momentum?

Digital Assets

Dubai introduces new crypto regulations with fines of up to $135,000

Against the backdrop of a crashing market and burned investors, Dubai has sealed a landmark rulebook that governs how the Emirate will regulate cryptocurrency activities.

Institutional FX

FX volume drops 16pct at Russia’s largest exchange in January

The Moscow Exchange, Russia’s largest exchange group, released its monthly batch of trading volumes and metrics for January 2023 – the latest readings showed a pullback across the board for multiple segments, namely in the FX, given lower volatility and a reduced trading schedule.

Institutional FX

Standard Chartered sets up wholly-owned brokerage arm in China

UK-headquartered bank Standard Chartered said its Hong Kong arm has been granted an in-principle approval for a brokerage license from the China Securities Regulatory Commission (CSRC).

Digital Assets

Revolut offers staking for Ether, Cardano, Polkadot, and Tezo

British fintech and banking firm Revolut has introduced crypto staking — a practice of earning rewards for serving as a transaction validator in the Ethereum blockchain – to its UK and European Economic Area (EEA) customers.

<