Forex rigging scandal: RBS, UBS, HSBC, JP Morgan and Citi set for lawsuit storm after £2bn FCA fine
Funds, companies and other traders hurt by banks manipulating the foreign exchange markets could make claims totalling many billions of pounds, lawyers said yesterday.
Five banks were fined a total of £2bn by the UK’s Financial Conduct Authority and the US Commodity Futures Trading Commission authorities because their traders fiddled key currency benchmarks.
But the fines could be the tip of the iceberg, as other regulators from the US and elsewhere are still in talks with banks. Lawyers believe banks will face claims for damages amounting to sums many times higher.
“They were fiddling forex rates for almost six years in a market this big, so just look at the numbers – the damage has got to be in the billions,” Hausfeld lawyer Anthony Maton told City PM The potential claims “dwarf the fines without a shadow of a doubt”, he added.
The claims could extend far beyond the traders on the opposite end of the banks’ manipulation, as other firms and funds use benchmarks for their own trades and could have lost out.
Any forex claims should be easier to prove than the Libor cases, according to lawyer Simon Hart from RPC. “Some of the contracts based on Libor went on for years, and could result in the participant being better or worse off at different times. With forex, market participants can go for the individual trades where they lost out.”
RBS, UBS, HSBC, JP Morgan and Citi were all fined by the UK and US authorities. But Barclays has yet to agree a settlement and other regulators still have to make their decisions – again leaving the banks open to another round of heavy fines.