The world's major FX trading banks continue to suffer the consequences of rigging the market in their favor. On Thursday, it was revealed that Barclays PLC, Goldman Sachs Group Inc., BNP Paribas SA, HSBC Holdings PLC and the Royal Bank of Scotland PLC have agreed on "substantial cooperation" in court, bringing the total settlements paid to over $2 billion.
Despite this, the matter is far from over as the lawyers handling the lawsuit said yesterday that they are pursuing claims against seven other banks. They added, "We look forward if necessary to litigating through trial," and warned that this is "just the beginning."
The lawsuit was filed by a group of clients, including individuals, institutional investors and hedge funds, that have engaged in FX Swaps , futures, options and spot transactions with the banks. Bank of America Corp., UBS AG, JPMorgan Chase & Co. and Citigroup Inc. have already settled their part in the lawsuit for over $800 million.
The lawsuit is the result of investigations by financial watchdogs and regulators around the world that focused on chat groups in which institutional dealers sent instant messages over their Bloomberg terminals. For a period of three years, in chat groups with names such as ”The Cartel” and “The Bandits’ Club,” bank traders shared information with competitors allowing them to execute their own trades before filling client orders.
The FX rates manipulation scandal had serious negative effects on the brands of the major international banks as traders were exposed, clients had their confidence shaken and investors worried about the overall impact of the fines crossing over $10 billion.
