Twelve major banks seek dismissal of forex price-rigging lawsuit

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NEW YORK May 30 (Reuters) – Twelve major banks asked a U.S.
judge on Friday to throw out a consolidated antitrust lawsuit
accusing them of colluding to rig prices in the $5
trillion-a-day foreign exchange market, saying the plaintiff
investors had failed to properly allege the existence of a

Investors, including the city of Philadelphia and a number
of hedge funds and pension funds, accused the banks of
conspiring since January 2003 to manipulate the WM/Reuters
Closing Spot Rates, using chat rooms, instant messages and

The defendants – 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, JPMorgan
Chase Co, Morgan Stanley, Royal Bank of
Scotland Group Plc and UBS AG – filed a joint
motion to dismiss the case on Friday in U.S. District Court in

“Despite their breathtaking scope, the complaints do not
plead a single fact about a single instance in which a single
defendant engaged in even one concerted act to manipulate any
particular currency rate,” the banks wrote. “Nor do they
identify a single transaction by a plaintiff or any factual
basis for a claim that any plaintiff has been injured by an
alleged conspiracy to manipulate benchmark exchange rates.”

The banks also asserted that the theory underlying the
conspiracy allegations “makes no economic sense.” Any attempt to
inflate one currency artificially would deflate the relative
value of other currencies against which it is traded, the banks
argued, and dealers cannot know in advance which currencies they
will be buying or selling each day.

Christopher Burke, one of the lead lawyers for the
plaintiffs, declined to comment immediately on Friday.

The case is proceeding against a backdrop of civil and
criminal probes worldwide into whether banks rigged prices to
boost profit at the expense of customers and investors.

The 12 defendants have an 84 percent global market share and
serve as counterparties in 98 percent of U.S. spot volume,
according to the lawsuit.

In their complaint, the investors said employees of the
defendants used such names as The Cartel, The Bandits’ Club and
The Mafia to swap confidential customer orders and trading
positions and colluded to set prices through such tactics as
“front running/trading ahead,” “banging the close” and “painting
the screen.”

U.S. District Judge Lorna Schofield is overseeing the

The case is In re: Foreign Exchange Benchmark Rates
Antitrust Litigation, U.S. District Court, Southern District of
New York, No. 13-07789.

(Reporting by Joseph Ax; Editing by Leslie Adler)

twelve major banks seek dismissal of forex price rigging lawsuit

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