Date
18 December 2017
JPMorgan and 11 other major banks have been accused of rigging currency rates to boost profit at the expense of customers and investors. Photo: Bloomberg
JPMorgan and 11 other major banks have been accused of rigging currency rates to boost profit at the expense of customers and investors. Photo: Bloomberg

JPMorgan to pay US$100 mln to settle US forex rigging suit

JPMorgan Chase & Co. will pay about US$100 million to settle a US antitrust lawsuit, in which investors accused 12 major banks of rigging currency prices, Reuters reported, citing an unnamed source.

JPMorgan becomes the first of the banks to agree to a settlement, the news agency said. The US District Court in Manhattan has been informed of the settlement between the bank and the investors through a letter filed on Monday. The settlement needs court approval.

The 2013 lawsuit is separate from criminal and civil probes worldwide into whether banks rigged currency rates to boost profit at the expense of customers and investors.

JPMorgan, the country’s largest bank, agreed in November to pay roughly US$1.01 billion to resolve such probes by US and European regulators. Five other banks settled for an additional US$3.3 billion.

In their complaint, investors including the city of Philadelphia, hedge funds and public pension funds accused the 12 banks of having conspired since January 2003 in chat rooms, instant messages and emails to manipulate the WM/Reuters Closing Spot Rates.

They said traders would use such names as The Cartel, The Bandits’ Club and The Mafia to swap confidential orders, and set prices through manipulative tactics such as “front running”, “banging the close” and “painting the screen”.

Other defendants include Bank of America Corp, Barclays Plc, BNP Paribas SA, Citigroup Inc., Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc, HSBC Holdings Plc. (00005.HK), Morgan Stanley, Royal Bank of Scotland Group Plc and UBS AG.

According to the lawsuit, the 12 banks held an 84 percent global market share in currency trading, and were counterparties in 98 percent of US spot volume.

“The settlement is a responsible step by Chase in addressing its involvement,” Michael Hausfeld, a lawyer for the investors, told Reuters in a phone interview. “It is a beginning with respect to the accountability of other banks engaged in the same trading.”

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