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Judge Allows Expanded Foreign Exchange Benchmark Case to Continue Against World’s Largest Banks

Related Lawyers: Michael D. Hausfeld, Sarah R. LaFreniere, William P. Butterfield, Timothy S. Kearns, Nathaniel C. Giddings, Reena A. Gambhir, Katie R. Beran
Related Practice Areas: Antitrust / Competition

September 20, 2016 (Washington, D.C.) – Yesterday, United States District Court Judge Lorna G. Schofield ruled in favor of investors, denying in substantial part a second motion to dismiss brought by seven defendant banks in In re Foreign Exchange Benchmark Antitrust Litig., 13-Civ-7789 (S.D.N.Y.). 

Plaintiffs filed an amended complaint in July 2015, alleging that the defendants – some of the world’s largest banks – conspired to fix prices in the foreign exchange market.  The amended substantially expanded both the breadth and scope of the conspiracy, alleging collusive trading throughout the day, adding four new defendants, and including new claims under the Commodity Exchange Act (“CEA”). Plaintiffs are represented by Hausfeld and Scott + Scott as co-lead counsel in this matter.

In a 56 page opinion, Judge Schofield concluded that plaintiffs “sufficiently plead[ed] both the existence of a conspiracy to fix benchmark rates and bid/ask spreads, and the [defendants’] participation in the conspiracy.”

The Court also allowed the case to move forward with respect to plaintiffs who traded FX products through U.S. exchanges, including CME and ICE. The Court denied the motion to dismiss with respect to exchange plaintiffs’ domestic antitrust claims under the Sherman Act and price manipulation claims under the CEA. The Court concluded that the amended complaint  substantially expanded claims under both the Sherman Antitrust Act and the CEA, concluding that even under a heightened pleading standard, the complaint “alleges sufficient facts to support ‘a strong inference of fraud’” necessary to bring claims under the CEA.

Speaking on the Court’s opinion, Michael Hausfeld, Chairman of Hausfeld, stated, “we believe this opinion recognizes the scope of misconduct that has occurred in the FX market and leaves us well-positioned to continue our work in vindicating the rights of harmed investors.”

The decision comes just weeks after plaintiffs filed a motion for approval of a plan of notice and a plan of distribution for nine preliminarily-approved settlements worth more than $2 billion.

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Notes to Editors

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About Hausfeld

Hausfeld is a leading global law firm with offices in Berlin, Boston, Brussels, London, New York, Philadelphia, San Francisco, and Washington, DC. The firm has a broad range of complex litigation expertise, particularly in antitrust/competition, financial services, sports and entertainment, environmental, mass torts, consumer protection, and human rights matters, often with an international dimension. Hausfeld aims to achieve the best possible results for clients through its practical and commercial approach, avoiding litigation where feasible, yet litigating robustly when necessary. Hausfeld’s extensive experience with alternative and innovative fee models offers clients a diverse menu of engagement options and maximum flexibility in terms of managing their cost exposure. Hausfeld is the only claimant firm to be ranked by the Legal 500 and Chambers & Partners as a top tier firm in private enforcement of antitrust/competition law in both the United States and the United Kingdom.

For more information about the firm, including recent trial victories and landmark settlements, please visit: www.hausfeld.com.

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