The total amount paid by banks to settle a civil lawsuit tied to allegations traders manipulated the currency market has now reached almost $2 billion following a recent round of settlement agreements.
HSBC Holdings PLC, Barclays PLC, BNP Paribas SA and Goldman Sachs Group Inc. have recently signed agreements to settle the case, according to people familiar with the matter.
HSBC agreed to pay $285 million and Barclays $375 million, some of the people said. The Wall Street Journal previously reported that Goldman Sachs Group was in advanced settlement discussions for $129.5 million. It was unclear how much BNP has agreed to pay.
The four banks are among a dozen lenders named as defendants in the suit filed in late 2013 by law firms Scott+Scott LLP and Hausfeld LLP on behalf of a group of claimants including several U.S. state pension funds, which alleged bank traders improperly shared confidential information about their clients’ orders through electronic chat rooms to unfairly manipulate the $5.3 trillion currency market.
Five other banks reached settlements with the claimants earlier this year totaling roughly $1 billion, according to public statements from the banks and law firms involved in the case.
The civil settlements follow $10 billion in bank fines after a yearslong investigation into the foreign-exchange market by many global regulators including the U.S. Department of Justice and the U.K.’s Financial Conduct Authority. While regulatory settlements in the U.K. last November and in the U.S. in May largely closed the book on the official investigation, problems related to the currency market continue to rumble on. Banks are likely to face similar civil claims in other jurisdictions such as London, where both plaintiff firms have an office, according to a person familiar with the matter.
Plaintiffs accused the banks’ traders of conspiring in instant messages and chat rooms with names such as “the Cartel,” and “the Dream Team” to manipulate foreign-exchange markets. “[Banks] participated in an unlawful conspiracy to restrain trade,” the filing said.
Three of the banks—Deutsche Bank AG, Credit Suisse AG, and Morgan Stanley—have still not agreed a civil settlement, according to people familiar with the matter.
None of the banks that have settled the suit have admitted to any wrongdoing, according to settlement agreements seen by the Journal.
The civil suit is pending in New York. U.S. district court judge Lorna G. Schofield is due to talk with lawyers and some of the defendants on Thursday, according to court filings.
A person familiar with the civil case said negotiations with other banks accelerated after J.P. Morgan Chase & Co. in January became the first bank to agree to a settlement. The U.S. bank agreed to pay out $99.5 million and disclose to the plaintiffs’ lawyers documentation it had already shared with U.S. and European regulators and trading data related to the alleged manipulation, according to documents reviewed by the Journal.
The agreements signed by other banks include similar clauses, according to people familiar with the matter.
