updated - July 8, 2020 Wednesday EDT
Scott+ Scott, Attorneys at Law, LLP, has announced that it has filed a Second Consolidated Amended Class Action Complaint regarding the manipulation of the Foreign Exchange market by the banks, according to press release published in the Globe Newswire.
The original complaint was filed in November of 2013 and alleges that certain financial institutions have manipulated the WM/Reuters Closing Spot Rates in Foreign Exchange Market from 2003 to 2013.
The revised complaint now alleges a broader conspiracy, following the cooperation of certain defendants that settled the lawsuit, and added four banks as defendants, that weren't previously named in the lawsuit filed in 2013, according to the press release.
David R. Scott, the managing partner of Scott+Scott, says, in the press release, that he hopes their new complaint will help eliminate the "unlawful and harmful" manipulation of the market.
"Our complaint makes clear that the conspiracy to manipulate the FX market was long-running and pervasive," he said.
The complaint alleges that multiple banks used chat rooms to illegally communicate and coordinate their actions.
The alleged names that were used were "The Cartel," "The Bandits Club," and "The Mafia."
The revised complaint also alleges that the defendants manipulated the Foreign Exchange market in "three separate respects," according to the press release.
First, the defendants allegedly fixed prices by agreeing t widen bid/ask spreads. The Bid/Ask spread represents the difference of the price at which banks will buy a currency and the price at which they will sell it.
Second, the defendants allegedly manipulated the Foreign Exchange benchmark rates, and third, the defendants allegedly exchanged key confidential customer information to trigger client stop loss and limit orders, the press release states.
Bank of Tokyo-Mitsubishi UFJ Ltd., RBC Capital Markets, LLC, Société Générale S.A., and Standard Chartered Plc were the four banks added as defendants of the revised complaint.
Bloomberg adds that bank traders from around the world have been scrutinized by authorities from the U.S., Europe and Asia.
The authorities started investigating when evidence that they conspired to rig the financial benchmark "that affect everything from mortgages to retirement products to cross-border money flows."
Bloomberg adds that the probe resulted in fines worth billions of dollars and even criminal conviction, in some cases.
The press release states that the case is in "In re Foreign Exchange Benchmark Rates Antitrust Litigation, Case No. 1:13-cv-7789 (S.D.N.Y)."
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