Some of the world’s largest financial institutions will have to face a class-action lawsuit over their participation in foreign exchange cartelisation actions in the spot trading market between 2007 and 2013.
Judges at the London Court of Appeal this Tuesday gave market participants the nod to pursue claims against Barclays PLC (LSE:BARC), JPMorgan Chase & Co (NYSE:JPM), Citigroup Inc (NYSE:C) and NatWest Group PLC (LSE:NWG), among others.
Thousands of market participants impacted by the collusion will be involved in the class-action lawsuit on an opt-out basis (meaning the suit can proceed without their permission).
Following a regulatory probe in 2019, the European Commission fined the banks €1.1bn (£940mln) to settle the rigging claims.
The commission determined that traders used online forums to exchange sensitive information and collude on currency swaps.
UBS Group dodged a fine by being the first to bring the cartel to light.
However, these fines were not used to compensate market participants.
“We are pleased that the Court of Appeal has allowed the opt-out claim against the banks found guilty of FX rigging to move forward so that at least some members of the class can continue to seek compensation,” said Michael O’Higgins, the proposed class representative in the UK forex cartel claim.
“However, we are extremely disappointed that it will be on behalf of a narrower class than the class that we wished to represent, and as a result many will lose out. We are therefore considering our options on how to move forward.”
The class action is estimated to be worth as much as £2.7bn.