Forex scandal lawyers pledge to fight on

Lawyers have vowed to continue pursuing global banks over the foreign exchange rigging scandal after agreeing a settlement of more than $2 billion (£1.3bn) with nine groups, including Royal Bank of Scotland.

Mark Taylor. Picture: Contributed

Barclays and HSBC were also among the latest banks to reach a settlement in the class action lawsuit, according to law firm Hausfeld – which said the deal was “just the beginning”.

The settlement, which includes Bank of America, BNP Paribas, Citi, Goldman Sachs, JP Morgan and UBS, is the latest payout by global lenders, which have already been hit with billions of pounds in fines by regulators over the forex scandal.

Hausfeld added that there would also need to be “concerted action” in London to pursue compensation for investors outside the US.

In total, regulators in the US and Europe have extracted more than $10bn in settlements with seven banks over the alleged manipulation.

Mark Taylor, dean of Warwick Business School and a former forex trader, said: “The fact these settlements are so big and this has been investigated so thoroughly by authorities in Europe, the US and Asia show just how serious the collusion and price fixing was, and how low confidence in the banks has sunk.

“We need fund managers and traders to think of their role for society rather than their wallet, after all what they do affects all our pensions and millions of people’s livelihoods.”

Hausfeld alleges that the world’s largest banks conspired to manipulate prices paid in the $5.3 trillion per day foreign exchange market from 2003.

Those banks involved in the latest settlement have also agreed to cooperate with investors in their ongoing litigation against 12 other firms, Hausfeld said. The settlement is subject to approval by a judge.

Michael Hausfeld, the law firm’s chairman, said it was the result of “lengthy, hard fought negotiations”.

He added: “Apart from the monetary component, each defendant has agreed to provide substantial cooperation, which will assist investors in their continued litigation against the non-settling defendants. While the recoveries here are tremendous, they are just the beginning.

“Investors around the world should take note of the significant recoveries secured in the United States and recognise that these settlements cover a fraction of the world’s largest financial market.”

Earlier this month, HSBC said it had set aside $1.3bn to cover costs related to ongoing probes around the world into the alleged rigging of foreign exchange markets.

In November, the UK’s Financial Conduct Authority (FCA) fined the bank £216.4m and slapped substantial penalties on four others after finding traders had attempted to manipulate forex rates. The FCA also handed down a £217m penalty on RBS, which in May was hit by a further $669m fine by US authorities for its part in the scandal.

Anthony Maton, managing partner at Hausfeld in London, said: “The extent of collusive conduct in the FX market is now clear.

“US investors will see compensation from these settlements. Others will not.

“There is no doubt that anyone who traded FX in or through the London or Asian markets – which transact trillions of dollars of business every day – will have suffered a significant loss as a result of the actions of the banks.”

Barclays, HSBC and RBS all declined to comment.