Lawyers predict industry-wide litigation against banks
Banking litigation lawyers are predicting “significant” litigation in the UK on the back of the Forex scandal.
Regulators worldwide have found evidence that banks shared sensitive information with each other through chat rooms and manipulated at least 21 currencies. The European Commission is close to ruling on whether the banks were guilty of anti-competitive conduct and any infringement would immediately reinforce the bank’s liability in Europe.
Anthony Maton, managing partner at the London office of Hausfeld, the firm that is leading the case against banks in the US, says: “There is no doubt that anyone who traded foreign exchange (FX) in or through the London market, and there is $5.3trn of business here every day, will have suffered significant loss as a result of the actions of the banks.”
The firm acted for five of the banks—Barclays, Citigroup, JP Morgan, RBS and UBS—that agreed to pay £3.7bn to the US authorities for manipulating the FX markets. In the UK, the FCA has imposed fines totalling £284m on Barclays Plc.
Simon Hart, banking litigation partner at RPC, says: “Legally it will be much easier to bring a civil claim against a bank for Forex manipulation than for Libor manipulation. The short term and one-off nature of Forex trades means it will be far easier for firms to prove that they lost money on particular trades during a period one of these banks was manipulating the market.”
Andy McGregor, banking litigation partner at RPC, says: “Once one large corporate pursues litigation as a result of this settlement, other businesses are likely to feel compelled to consider bringing a claim on behalf of their shareholders. That could see the levee break in terms of industry-wide litigation against the banks.”
