US Department of Justice seeks to intervene in Forex benchmark rate fixing case again

Maria Nikolova

The DOJ requests a three-month extension of discovery stay in a case targeting major banks.

The United States Department of Justice (DOJ) seeks to intervene again in a Forex benchmark rate fixing case, just several months after it secured a stay in the discovery process in the case which targets some of the world’s major banks including JPMorgan Chase & Co. (NYSE:JPM), Citigroup Inc (NYSE:C), Bank of America Corp (NYSE:BAC), and HSBC.

Earlier this week, the United States Department of Justice, through the Antitrust Division and the Fraud Section of the Criminal Division, sent a Letter to Judge Lorna G. Schofield of the New York Southern District Court asking for a three-month extension of the limited discovery stay in two cases about Forex rate manipulation, including captioned Nypl v. JP Morgan Chase & Co. et al (1:15-cv-09300).

In particular, the DOJ requests that depositions and interviews of current and former employees of seven defendant banks – Citibank, JPMorgan Chase, Barclays, RBS, UBS, BNP Paribas, and HSBC – are stayed. Individuals who worked for any of the above-referenced seven banks only prior to the beginning of the class period (December 2007) still may be deposed.

Putting it otherwise, the DOJ wants extension to the stay it obtained back in December 2017. This stay has hampered the plaintiffs’ efforts to take depositions from:

  • Stuart Alderoty, Esq., former Senior Executive Vice President and General Counsel, HSBC Bank USA, N.A.;
  • Marc Moses, Executive Director and Group Chief Risk Officer, HSBC Holdings plc;
  • James Fuqua, Esq., General Counsel, UBS Securities LLC, Investment Bank Americas;
  • Axel Weber, Chairman of the Board of Directors, UBS Group AG;
  • Matthew Fitzwater, Esq., Global Head of Litigation, Investigations, and Enforcement, Barclays PLC;
  • Rohan Weerasinghe, Esq., General Counsel and Corporate Secretary, Citigroup, Inc.;
  • Stephen Cutler, Esq., former General Counsel and current Vice Chairman, JPMorgan Chase & Co.;
  • James Esposito, Esq., Global General Counsel, NatWest Markets and General Counsel (Americas), Royal Bank of Scotland.

The plaintiffs are opposing the DOJ’s request. On Tuesday, March 13, 2018, Judge Lorna G. Schofield agreed to give them time until March 16, 2018, to state their objections.

Let’s recall that on Monday, March 12, 2018, Judge Schofield issued an Order which denied the Motion to Dismiss launched by the defendants in this case.

The action is brought on behalf of 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.

The Judge found that the plaintiffs’ third amended complaint sufficiently pleads antitrust injury because it alleges facts supporting a reasonable inference that the foreign currency consumer retail market in which the plaintiffs participated was directly restrained by the banks’ alleged manipulation of FX benchmark rates.

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