Five global investment banks are facing a cartel class action lawsuit after a suit was filed at the Federal Court yesterday.
Maurice Blackburn Lawyers, who is also taking on AMP in a class action, have launched the suit against UBS, Barclays, Citibank, Royal Bank of Scotland and JP Morgan, claiming the banks colluded to rig foreign exchange rates.
The suit alleges that between January 2008 and 15 October 2013, traders in chat rooms bearing names such as ‘The Cartel’ and ‘The Mafia’ communicated directly with each other to coordinate the manipulation of FX benchmark rates.
“The chat rooms included those named ‘The Cartel’, ‘The Mafia’, ‘One Team’, ‘One Dream’, ‘The Players’, ‘The Three Musketeers’, ‘A Co-Operative’, ‘The A-Team’, ‘The Sterling Lads’, ‘The Essex Express’ and ‘The Three Way Banana Split’,” according to Maurice Blackburn’s statement of claim.
It is alleged that the actions resulted in the pricing of ‘spreads’ and the triggering of client stop loss orders and limit orders.
“Sharing with each, alternatively one or more, of the other respondents, and/or one or more of the other cartel participants, information in relation to trade in FX Instruments with respect to one or more of the affected currencies, including in relation to trade volumes and/or trade strategy,” said the statement of claim.
The alleged conduct has been the subject of extensive regulatory and private enforcement action worldwide including settlements in the US and Canada resulting in the payment of US$2.3 billion and CA$107 million respectively.
Some of the allegedly affected currencies include the Australia, Canadian, New Zealand and US dollar as well as the Russian ruble, Indian rupee, the Euro and the British pound.
Maurice Blackburns principal lawyer Kimi Nishimura said that the cartel behaviour could have affected a number of Australian business and investors.
“Australian businesses and investors – particularly medium to large importers, exporters, institutional investors and businesses with operations overseas – have been affected by the distortion of the FX market by these banks.
“Such cartel behaviour cheats Australian businesses in circumstances where they may already have been vulnerable to currency fluctuations,” she said.
The class action will be represented by lead plaintiff J.Wisbey and Associates, a medical equipment importer, but is open to any customers that brought or sold currency during the period where total value of transactions exceeded over $500,000.
Spokespeople for the banks involved did not issue a statement at time of writing.
Eliot Hastie is a journalist at Momentum Media, writing primarily for its wealth and financial services platforms.
Eliot joined the team in 2018 having previously written on Real Estate Business with Momentum Media as well.
Eliot graduated from the University of Westminster, UK with a Bachelor of Arts (Journalism).
You can email him on: [email protected]
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