Major institutional investors, including BlackRock and Allianz SE’s Pacific Investment Management, have joined forces to sue 16 major banks, accusing them of rigging prices in a day foreign-exchange market valued around US$5.1 trillion.

Opting out

The lawsuit has been filed in the US District Court in Manhattan by plaintiffs who decided to ‘opt out’ of similar nationwide litigation that has resulted in US$2.31 billion in settlements with 15 of the banks. They presumably expect to recover more by suing on their own. These settlements followed worldwide regulatory investigations that have led to more than US$10 billion in fines for several banks, and the convictions or indictments of some traders. The banks being sued are Bank of America, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan Chase, Morgan Stanley, Japan’s MUFG Bank, Royal Bank of Canada, Royal Bank of Scotland, Societe Generale, Standard Chartered and UBS.

Chat rooms

The lawsuit accuses the banks of violating US antitrust law by conspiring from 2003 to 2013 to rig currency benchmarks, including the WM/Reuters Closing Rates, for their own benefit by sharing confidential orders and trading positions, allegedly using chat rooms. The 21-page complaint states, ‘by colluding to manipulate FX prices, benchmarks and bid/ask spreads, defendants restrained trade, decreased competition and artificially increased prices, thereby injuring plaintiffs. Law firm Quinn Emanuel Urquhart & Sullivan is representing the opt-out investors.