Plans to depose major banks’ execs spark disagreement in Forex benchmark rate fixing case

Maria Nikolova

Banks insists that instead of deposing high-level execs like Marc Moses and Axel Weber, the plaintiffs should take the testimony of Forex traders.

Plans by the plaintiffs in a Forex benchmark rate fixing case to depose high-level executives of major banks have led to disagreement between the parties in the lawsuit. This is indicated by letters filed with the New York Southern District Court on Friday, January 31, 2020.

The documents, seen by FinanceFeeds, reveal a list of top-notch executives at major banks like JPMorgan, HSBC, Citi and UBS, whom the plaintiffs in this case wish to depose.

The plaintiffs in this case represent a putative class of consumers and end-user businesses alleging that they paid inflated foreign currency exchange 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. Let’s recall that the plaintiffs secured lifting of the discovery stay in this action and are now finally allowed to push for depositions.

On January 3, 2020, the plaintiffs served notices seeking testimony from eight individuals, some of whom who signed Plea Agreements or Deferred Prosecution Agreements with the United States Department of Justice (DOJ) in 2015:

  • Stuart Alderoty, Esq. – Former Senior Executive Vice President and General Counsel, HSBC Bank USA, N.A.
  • Stephen Cutler, Esq. – Former Executive Vice President and General Counsel, JPMorgan Chase & Co.
  • James M. Esposito, Esq. – Global General Counsel (since 2016); General Counsel (Americas), and Managing Director (2015-2016); Co-General Counsel (Americas), and Managing Director (2011-2015) (NatWest Markets Plc, previously known as The Royal Bank of Scotland plc);
  • Matthew Fitzwater, Esq. – Global Head of Litigation, Investigations, and Enforcement, Barclays PLC (since 2017); Americas Head of Litigation, Investigations, and Enforcement, Barclays PLC (2014-17);
  • James Fuqua, Esq. – Former General Counsel, UBS Investment Bank, former General Counsel, UBS Investment Bank Americas, and former Managing Director, UBS AG; currently Global Head of Markets, Legal, Barclays;
  • Marc Moses – Former Group Chief Risk Officer and Executive Director, HSBC Holdings plc;
  • Axel Weber – Chairman of the Board of Directors, UBS AG and UBS Group AG;
  • Rohan Weerasinghe, Esq. – General Counsel and Corporate Secretary, Citigroup Inc.

On January 13, 2020, the defendants served objections to these notices. The parties thereafter met and conferred, but were not able to resolve all of their disputes.

The plaintiffs explain that they have repeatedly sought to take the depositions of the signatories of the Plea Agreements and Deferred Prosecution Agreements, but these depositions have been stayed for over three and a half years. The plaintiffs have attempted to take the depositions of the Signatories since September 2015, have opposed the stay no less than eight times, and noticed the depositions of the Signatories four times. The plaintiffs argue that it should come as no surprise to the defendants that the plaintiffs seek to take and conclude these depositions.

The defendant banks, however, disagree. According to them, the plaintiffs are seeking improper apex depositions (that is, depositions of high-level executives – Ed.) of various defendants’ and non- defendants’ current and former senior legal counsel and other executives, and improper Rule 30(b)(6) depositions.

According to the defendant banks, the plaintiffs’ request to depose the Apex Executives is improper because these individuals lack non-privileged first-hand knowledge of the facts addressed in the relevant DOJ Agreements. The defendants insist that the executives the plaintiffs are seeking to depose are all senior executives who learned about the results of FX investigations and the progress of negotiations with DOJ through privileged conversations with counsel.

The defendants are willing to stipulate that the signatures on the DOJ Agreements are authentic; that the signatories had the authority to execute the agreements on behalf of their banks; and that these documents accurately reflect the agreements that were reached. However, inquiries beyond these matters would invade privilege, the banks argue.

The defendants say that the executives plainly lack any non-privileged first-hand knowledge of the facts relevant to plaintiffs’ allegations about FX market conduct, let alone any unique discoverable knowledge.

According to the defendants, to the extent plaintiffs seek depositions to explore non-privileged facts underlying the DOJ Agreements, the appropriate course is for them to rely on depositions of the witnesses who have actual direct knowledge of those facts. The relevant DOJ Agreements were based on communications in a single chatroom with four participants: Matt Gardiner (employed at different times by Barclays and UBS), Rohan Ramchandani (Citi), Chris Ashton (Barclays), and Richard Usher (employed at different times by JPMorgan and RBS). According to the defendants, these four witnesses are far more suitable deponents than the Apex Executives for questions about facts underlying the relevant DOJ Agreements.

Further, according to the banks, the proposed deposition of Mr Weber is improper because he did not sign any of the DOJ Agreements. Mr Weber signed a certificate of corporate resolutions of UBS AG relating to UBS’s DOJ Agreement, but he did not sign a plea agreement or deferred prosecution agreement.

The proposed depositions of Mr Alderoty and Mr Moses, the banks say, are improper because the only DOJ agreement they signed – the 2012 Deferred Prosecution Agreement between DOJ, HSBC Bank USA, N.A., and non-party HSBC Holdings plc – concerns anti-money laundering compliance issues under the Bank Secrecy Act. The 2012 DPA is entirely irrelevant to this antitrust action concerning retail FX transactions, the defendants say.

The defendants also stress that several of the Apex Executives from whom plaintiffs seek testimony are no longer employed by any defendant, or are employed by a non-defendant. Mr Alderoty is no longer employed by HSBC Bank USA, N.A., Mr Cutler is no longer employed by JPMorgan Chase & Co., and Mr Fuqua is no longer employed by UBS. Accordingly, the deposition notices directed to these individuals are insufficient to create any obligation for HSBC Bank USA, N.A., JPMorgan Chase & Co., or UBS to produce them for a deposition.

In addition, Mr Moses has never been employed by any of the defendants in this case; he is employed by HSBC Holdings plc, which was dismissed for lack of personal jurisdiction on March 22, 2018. Thus, plaintiffs’ notice of deposition for Mr Moses is said to be insufficient to create any obligation for the HSBC defendants to produce him for a deposition.

The lawsuit continues at the New York Southern District Court.

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