New York (AFP) — A dozen banking giants have been sued in New York for allegedly fixing global foreign exchange rates in the latest ripple to accompany government probes of the huge market.
The defendants in the class-action lawsuit, which include BNP Paribas and JPMorgan Chase, shared confidential information during private online chat sessions to collude and fix trades on the key WM/Reuters foreign exchange rate, which is set each afternoon in London, according to a complaint filed Monday.
The conspiracy “impacted the pricing of trillions of dollars’ worth of FX Instruments, inflicting severe financial harm on Plaintiffs and members of the Class,” the complaint said.
The complaint did not quantify the losses, calling the impact of the rate-fixing “presently undetermined.”
The other defendants in the case are: Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, Morgan Stanley, RBS, and UBS.
A dozen plaintiffs are in the class-action suit, which amends and expands a November 2013 suit against seven banks filed by Haverhill Retirement System of Haverhill, Massachusetts.
The 11 plaintiffs that joined the original lawsuit Monday include Aureus Currency Fund, a California investment fund, the City of Philadelphia and the Oklahoma Firefights Pension and Retirement System.
Defendants in the case are “dominant” dealers in foreign exchange, with about 84 percent of market share with transactions worth some $5.3 trillion per day.
The complaint called foreign exchange “one of the world’s least regulated financial markets” and rated it an “opaque” system because most trading takes place away from exchanges.
The suit comes as regulators in the United States, the European Union, Britain, and other venues launch probes of foreign exchange market manipulation.
Banks have suspended or fired more than 30 employees in the wake of these probes, according to the complaint.
Photo by bruceg1001/Flickr
Copyright 2014 The National Memo