Institutional investors such as BlackRock Inc. (NYSE: BLK) and Allianz SE’s (OTC: ALIZF) Pacific Investment Management Co. have received the legal go-ahead to pursue their lawsuit against 15 large banks for price rigging in the foreign exchange markets.
A Manhattan judge has ruled it can be plausibly alleged that the banks conspired to rig currency benchmarks between 2003 to 2013 to profit at the expense of nearly 1,300 plaintiffs, including numerous mutual funds and exchange-traded funds.
U.S. District Judge Lorna Schofield ruled, “This is an injury of the type the antitrust laws were intended to prevent.”
The list of 15 spans big names in banking such as Bank of America Corp (NYSE: BAC), Barclays PLC (NYSE: BCS), Citigroup Inc. (NYSE: C), JPMorgan Chase & Co. (NYSE: JPM), and Goldman Sachs Group Inc. (NYSE: GS).
Why It Matters
According to Reuters, the plaintiffs allege banks improperly shared trading positions and confidential orders in online chat rooms using names such as “The Cartel,” “The Mafia,” and “The Bandits Club.”
Improper trading tactics such as “front running,” “banging the close,” and “taking out the filth” were allegedly used by banks.
Banks have argued that plaintiffs have shown no transactions where such manipulations caused losses.
Some parts of the claim were dismissed by Judge Schofield, as were Allianz’s plaintiffs.
The litigation started in November 2018, after the plaintiffs opted out of similar nationwide litigation, which resulted in $2.31 billion settlement with most banks.
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