Banks Lawsuit: Preliminary Approval Granted for $2 Billion in Settlements

A U.S federal court on Tuesday granted the plaintiffs’ motion to preliminarily approve nine settlements in the Foreign Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Benchmark Rates Antitrust Litigation case. As we reported back in August, these settlements with Bank of America, Barclays, BNP Paribas, Citi, Goldman Sachs, HSBC, JPMorgan, RBS, and UBS will cost the banks well over $2 billion in total.

The lawsuit was filed by clients- including individuals, institutional investors and hedge funds- that have engaged in FX Swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term, futures, options and spot transactions with the banks. According to global investigations, bank traders shared information with competitors allowing them to execute their own trades before filling client orders via Bloomberg terminal chat groups with names such as ”The Cartel” and “The Bandits’ Club,” for about three years.

Michael Hausfeld, chairman of a law firm representing plaintiffs in the case, stated yesterday after the court’s decision: “Today’s preliminary approval order represents a huge step forward for FX market participants that were harmed by the defendants’ cartel. We will continue to vigorously litigate this case against the non-settling defendants, and we are confident that the substantial cooperation provided by the settling defendants – much of which will be triggered by the order – will be instrumental in securing additional compensation for US investors.”

Anthony Maton, managing partner at Hausfeld London, added: “US investors are moving closer to being compensated for the banks’ FX misconduct. For European, Asian, or other non-US investors, these settlements speak to the breadth of misconduct in the FX market. Concerted action in London – which Hausfeld is pursuing – represents the best opportunity for such investors to recover the losses suffered as a result of the banks’ misbehavior.”