May 27, 2019 (Euclid Infotech Ltd via COMTEX) -- Citigroup Inc, Royal Bank of Scotland Group plc and JPMorgan Chase & Co are among five banks named in a class action lawsuit in Australia seeking damages for colluding on foreign-exchange trading strategies.
UBS Group AG and Barclays plc were also named in the suit lodged on Monday in the Federal Court by Maurice Blackburn Lawyers. The action claims the banks colluded to rig foreign exchange rates, boosting profits at the expense of Australian businesses and investors, the law firm said in a statement.
Spokesmen at Citi and JPMorgan in Sydney and Barclays in Hong Kong had no immediate comment on the suit. UBS didn't return a call seeking comment. RBS didn't immediately respond to an inquiry outside of regular business hours in London, where it is a public holiday.
Citi, RBS, JPMorgan and Barclays were among five lenders that agreed to pay European Union fines totalling 1.07 billion euros (S$1.65 billion) earlier this month for colluding on foreign exchange strategies. UBS escaped a fine because it was the first to tell regulators about the collusion.
Traders allegedly used chat rooms bearing names such as "The Cartel", "The Bandits' Club", and "The Mafia", and communicated directly with each other to coordinate the manipulation of FX benchmark rates, control the pricing of spreads and to trigger client stop-loss orders and limit orders, Maurice Blackburn said.
The manipulation of benchmark foreign-exchange rates was exposed in 2013 via Bloomberg stories, triggering regulatory probes in the US, the UK and Switzerland. More than a dozen financial institutions have paid about US$11.8 billion in fines and penalties globally, with another US$2.3 billion spent to compensate customers and investors.
While the US has won guilty pleas from JPMorgan, Citigroup, RBS and Barclays, three British traders in the group known as "The Cartel" were acquitted by a US federal court last year of using a chatroom to coordinate trades and manipulate prices on the spot exchange rate for euros and US dollars.
Maurice Blackburn's suit claims Australian companies and investors, including importers, exporters, institutional investors and businesses with overseas operations have been affected by the distortion of currency markets by the five banks. The action is on behalf of customers who bought or sold more than A$500,000 (S$475,900) of foreign currency between Jan 1 2008 and Oct 15, 2013, the law firm said.