London Court Rebirths $3.46B Forex Scandal. Second Chance for Justice

<p>In a
significant development today (Tuesday), the London court reignited a mass lawsuit of $3.46
billion against leading banks, including JPMorgan and Citigroup,
over claims of foreign <a href="https://www.financemagnates.com/terms/e/exchange/">exchange</a> (FX) rigging. This lawsuit was initially presented by Phillip Evans, the former Inquiry Chairman at the Competition
Markets Authority, acting on behalf of thousands of financial institutions,
pension funds, and asset managers.</p><p>For over ten years, the banks have allegedly been communicating in a so-called
'cartel', using special Internet chat rooms to agree on manipulating rates in
real markets.</p><p>London Court Stirs $3.46b
Forex Lawsuit Back to Life</p><p>The return
of the lawsuit is made possible by clarifying certain legal issues related to
the first case. Evans lodged the lawsuit, which also targets UBS, Barclays, and
NatWest, under an opt-out basis. This approach implies that potential claimants
are automatically included in the claim, except if they decide to opt-out.</p><p><a href="https://www.financemagnates.com/institutional-forex/british-court-blocks-forex-rigging-class-action-against-major-banks/" target="_blank" rel="follow">In a
contrasting ruling last year</a>, the Competition Appeal Tribunal (CAT) stated that
claims could only be launched on an opt-in basis. This condition meant that
claimants had to enrol in the case actively. The CAT identified this
requirement as a hurdle, making the case unviable.</p><p>However,
this ruling was overturned by the Court of Appeal on Tuesday, allowing the case
to proceed at the CAT. This revival of the lawsuit marks a significant move in
the unfolding legal landscape around forex rigging allegations involving major
global banks.</p><blockquote><p lang="en" dir="ltr">London court revives $3.5 bln mass forex lawsuit against banks</p>— CGTN Europe (@CGTNEurope) <a href="https://twitter.com/CGTNEurope/status/1683783785249210369?ref_src=twsrc%5Etfw">July 25, 2023</a></blockquote><p>The matter
pertains to two FX 'cartels' known as 'Essex Express' and 'Three-Way Banana
Split'. The European Commission imposed a combined fine of $1.11 billion on
them in 2019 in relation to the proposed lawsuit. Now, the amount is much
larger, and it is not the government authorities expecting compensation but
financial institutions and investors that have been harmed by the illegal
actions of large banks acting in collusion.</p><p>FX Rigging Drags behind
Large Banks for Years</p><p>The topic
of 'cartels' formed by traders of large investment banks on the FX market has
been heating up industry discussions for years. Given the involvement of many
institutions and individuals, the case has many threads. Thus, separate lawsuits
and investigations in this matter have been conducted worldwide.</p><p>According
to information from 2021, banks acting in collusion <a href="https://www.financemagnates.com/institutional-forex/bank-cartels-might-have-used-200-chat-rooms-for-fx-rigging/" target="_blank" rel="follow">could use a total of 200
different chat rooms</a> to coordinate currency rate manipulation on the market
worth nearly $7 trillion each day.</p><p>Over the
years, <a href="https://www.financemagnates.com/institutional-forex/exchanges/us-court-approves-fx-rigging-lawsuit-against-15-big-banks/" target="_blank" rel="follow">more than a dozen major international banking giants</a> have been accused
of falsifying <a href="https://www.financemagnates.com/terms/f/forex/">forex</a> reference rates <a href="https://www.financemagnates.com/institutional-forex/regulation/the-fx-rigging-scandal-a-year-after-lesson-learned/" target="_blank" rel="follow">between 2003 and 2013</a>. To date, banks have
paid about $11.8 billion in fines to several global regulatory bodies and had
to pay an additional $2.3 billion to compensate customers and investors.</p>

This article was written by Damian Chmiel at www.financemagnates.com.