March 2014 Newsletter


•  Scott+Scott Appointed as Lead Counsel in In re Foreign Currency Benchmark Rates Antitrust Litigation

 American, Canadian, and Mexican Antitrust Officials Participate in Meeting to Discuss Antitrust Enforcement

•  Securities Class Action Filings Increase Nine Percent in 2013

•  Assistant Attorney General William Baer Discusses Private Enforcement of Federal Competition Laws

•  On The Record

•  Conferences and Educational Seminars


            Scott+Scott Appointed as Lead Counsel in In re Foreign Currency Benchmark Rates Antitrust Litigation

On February 13, 2013, Scott+Scott LLP was appointed interim class counsel for plaintiffs in In re Foreign Currency Benchmark Rates Antitrust Litigation, No. 13-cv-7789, an antitrust class action pending in the Southern District of New York against the world’s major currency dealers.  Defendants include Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, Lloyds Banking Group, Morgan Stanley, Royal Bank of Scotland, and UBS.

Plaintiffs allege that foreign currency traders at the defendant banks shared sensitive market information to execute a variety of strategies to move benchmark foreign exchange rates.  The key benchmark rates at issue are known as the WM/Reuters “fix,” which is set at 4 p.m. London time (11 a.m. New York time), and is based on actual trades and order rates recorded by Reuters during a one-minute fix period.  Reuters then calculates the benchmark using the median of the reported trades and orders.  Plaintiffs allege that defendants’ manipulation of the WM/Reuters fix affected the pricing of trillions of dollars’ worth of financial transactions in the United States and elsewhere.  The main claim asserted is violation of Section 1 of the Sherman Antitrust Act, 15 U.S.C. §1.

The conspiracy alleged in the action is also the subject of up to twelve pending investigations by law enforcement agencies worldwide, including investigations by the U.S. Department of Justice (“DOJ”), the European Commission, and the United Kingdom’s Financial Conduct Authority.  In a rare interview discussing the DOJ’s active investigation into manipulation of the FX market, United States Attorney General Eric H. Holder, Jr. stated that the DOJ is “taking a lead role” in the “truly global investigation.”  He further stated, “the manipulation we’ve seen so far may just be the tip of the iceberg,” and that “this is potentially an extremely consequential investigation.”

Furthermore, many of the defendants have disclosed that they are undergoing internal investigations.  To date, approximately twenty traders at defendants’ foreign currency trading desks have been suspended or terminated.  For example, on February 20, 2014, JPMorgan Chase & Co. disclosed in its 10-K annual report that the company “received information requests, document production notices and related inquiries from various U.S. and non-U.S. government authorities regarding the Firm’s foreign exchange trading business.  These investigations are in the early stages and the Firm is cooperating with the relevant authorities.”

Consolidated complaints are due in the matter on March 31, 2014.

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American, Canadian,and Mexican Antitrust Officials Participate in Meeting to Discuss Antitrust Enforcement

In this modern era of information and technology, the world is becoming a smaller place.  Advances in technology and communication have brought people and entities closer together and created a global interconnectivity that was unfathomable decades ago.

A corollary of this modernization is that global financial markets are no longer isolated from one another, and technological or financial innovations have allowed for a global financial market that is deep, liquid, and increasingly interconnected.  Financial events in one part of the world that once seemed to be a local phenomenon are now seen as part of a broader global interaction.  In such a globalized financial world, questions naturally arise about the effective enforcement of financial rules for entities that transact business in one part of the world, but whose actions have a potentially global impact.

Recently, the heads of the antitrust agencies of the United States, Canada, and Mexico met in Washington D.C. to discuss a wide variety of solutions.  The overall goal of this meeting was to provide for a comprehensive means for dealing with unfair competition or monopolistic corporate action in one country that has the growing probability of impacting consumers worldwide.  The discussions focused on strengthening relationships between the nations regarding active enforcement actions, as well as communicating common challenges facing each nation’s fair competition laws. 

The Washington meeting builds upon earlier foundations between the three nations.  In 1995, the United States and Canada signed a cooperation agreement to protect against unfair competition.  Likewise, in 1999, the United States and Mexico reached a similar agreement.  In 2001, Mexico and Canada crafted a nearly identical pact.  Ultimately, these agreements were designed to lay out ground rules for enforcing violations of corporate competition and prevent the likelihood of duplicative enforcement actions.  The three nations are also parties to the North American Free Trade Agreement, which includes a provision regarding unfair competition that promises cooperation in antitrust investigations.

The Washington meeting was seen as a necessary reinforcement by the three nations, as each faces new threats in a developing and intertwined global financial market.  The mutual support that each nation expressed during the meeting was seen as a positive sign that the three nations will continue with a good working relationship as it relates to antitrust enforcement. “We look forward to working together to ensure effective enforcement of our competition laws as well as to promote sound policies that affect consumers in our three countries,” Chairwoman Edith Ramirez of the U.S. Federal Trade Commission stated after the meeting. 

As more businesses in the United States begin transacting overseas, and more overseas businesses focus their activity here, the Federal Trade Commission will require more and more cooperation from international sources to police illegal activity.  To that end, the trilateral meeting in Washington was widely seen as further sowing the seeds for that anticipated cooperation. 

Ultimately, the changing landscape of the increasing global economy will necessitate new methods for enforcement agencies.  The cooperation between nations like the United States, Canada, and Mexico as seen recently in Washington is a significant step in that direction and signals a globally tailored approach to an increasingly global problem. 

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Securities Class Action Filings Increase Nine Percent in 2013

            On January 28, 2014, Cornerstone Research released a publication entitled Securities Class Action Filings - 2013 in Review.  Cornerstone Research is an economic and financial consulting firm that monitors and reports on trends in legal filings.

            According to the publication, the total number of securities class action filings was up nine percent in 2013 compared to 2012.  Related trends that the publication noted were an increase in the number of, and concentration of, suits filed in the Second and Ninth Circuits, the Circuits that encompass New York and California, respectively.  56 suits were filed in the Second Circuit in 2013, compared to 46 suits in 2012.  48 suits were filed in the Ninth Circuit in 2013, compared to only 28 suits in 2012.  Although the number of total filings increased in 2013 when compared to 2012, for the sixth year in a row the total number of filings was below the yearly average since the publication began keeping statistics on the filings in 1997.  

            In addition to analyzing the filing trends, for the first time the 2013 Year in Review included an analysis of class certification trends.  This analysis found that between 2002 and 2010, class certification was denied for reasons based on the merits of the motion in less than two dozen cases.  During this same time period, class certification was granted in part or in full in 48 percent of cases.  The publication was spurred to note these trends due to the increased visibility that class certification issues are receiving due to the Supreme Court’s decision in Comcast v. Behrend, which requires that damages be measured on a class-wide basis, consistent with the class’s theory of liability.

            Looking ahead to 2014, the publication highlighted Halliburton v. Erica P. John Fund as a Supreme Court case that may have wide-ranging effects on federal securities class actions.  At issue is the “fraud on the market” presumption, which established that plaintiffs did not need to show that individual plaintiffs relied on any misleading statements if the market that security at issue traded on is “efficient”—or, that the share price reflected all of the publicly available information regarding the security.  The petitioners seek to limit or do away with the fraud on the market presumption.  Arguments will be heard by the Supreme Court in March 2014.

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Assistant Attorney General William Baer Discusses Private Enforcement of Federal Competition Laws

The European Competition Forum is an annual conference on competition policy.  In remarks prepared for the 2014 European Competition Forum that took place in February, Assistant Attorney General William Baer discussed the role of private litigators in the enforcement of competition law in the United States.  Mr. Baer noted that since the late 1800s, the United States has relied on joint federal, state, and private enforcement against anticompetitive conduct, with each playing “different, yet complementary, roles.”  Federal and state agencies protect the public in general from the harms flowing from anticompetitive conduct, while private antitrust attorneys act on behalf of the specific concerns of their clients, often seeking damages for harms inflicted by anticompetitive conduct.  “[T]he precise role each enforcer now plays has been determined to an extent by what economists call the principle of comparative advantage: each enforcer focusing on what that enforcer is best positioned to do,” Baer remarked.

Using cartel enforcement as an example, Baer described the respective roles of the federal agencies and private litigators in the suppression of anticompetitive conduct.  For instance, the lead federal agency, the U.S. Department of Justice, Antitrust Division, possesses criminal investigative tools that private enforcers do not, including among other resources, the grand jury and its power to compel both the production of documents and testimony and the direct support of the Federal Bureau of Investigation.  In addition, efforts to frustrate Justice Department cartel investigations often are themselves federal crimes, such as perjury and obstruction of justice, which subject the perpetrators to incarceration.

While the Justice Department is generally legally barred from directly assisting private plaintiffs’ lawyers pursuing damages actions, the Justice Department’s cartel prosecutions often facilitate success in private damages actions.  For instance, cartel convictions, including those secured through guilty pleas, constitute “prima facie evidence” in follow-on private damages actions against those convicted.  In major cartel cases, as Baer noted, the damages recovered on behalf of U.S. consumers by private litigants often exceed the fines imposed in the Justice Department’s prosecutions.  “To assure that private parties have an adequate economic incentive to undertake costly antitrust litigation, federal competition law in the United States authorizes the award of treble damages, plus attorneys’ fees,” said Baer.  The treble damages provision, as noted by the U.S. Supreme Court, is “a chief tool in the antitrust enforcement scheme” because the treble damage threat creates “a crucial deterrent to potential violators.”  Baer observed that treble damages available to private litigants against cartels promote both deterrence and compensation, as most of this recovery goes to victims of conspiracies.

Baer cited the Antitrust Criminal Penalty Enhancement and Reform Act of 2004 (“ACPERA”) as another example of the federal and private enforcers working in tandem to prosecute anticompetitive conduct.  Under ACPERA, a company accepted into the Department of Justice, Antitrust Division’s leniency program has its exposure in civil damages litigation limited to its pro rata share of the total damages before trebling, provided that the company cooperates with the plaintiffs in the private damages action.  

            In closing, Baer noted that “[o]utside the cartel and merger areas, competition law in the United States is largely developed in private litigation.  Specifically that judicial precedents set in civil litigation often apply to Department of Justice enforcement actions, and thus are important both to consumers and to the development of the law.”

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“A word is not crystal, transparent and unchanging, it is the skin of a living thought and may vary greatly in color and content according to the circumstances and time in which it is used.”

Oliver Wendell Holmes Jr.,
United States Supreme Court Associate Justice

DOB: March 8, 1941

Conferences and Educational Seminars

March Events in the USA

+March 1-4, 2014

California Association of Public Retirement Systems (CALAPRS)

Westin Mission Hills

Palm Springs, CA

The main focus of CALAPRS General Assembly conference is to provide an educational and informational forum for the public retirement systems in the state of California.  Various service providers, university professors, as well as professional retirement organizations such as National Institute on Retirement will give educational presentations. This year’s program will offer practical guidance in a “Post-GASB World: New Rules and Emerging Guidance” and actuarially assumed rates of return.

+March 12, 2014

Investment Consultants Forum produced by Opal Financial Group

Marriott Marquis, Times Square

New York, New York

Opal is an innovative, forward thinking organization aimed at bringing public pension leaders up to-date with the latest information regarding public pension management.  This annual forum will provide a unique environment for developing dialogue between plan sponsors, managers and consultants, and will feature panel-driven discussions.  Topics will include marketing to plan sponsors-from RFPs to Finals Presentations, Proper Industry Practices for service providers and the 2014 market outlook. Complimentary registration for representatives of public pension and Taft-Hartley funds.

+March 12, 2014

Family Office Winter Forum sponsored by Opal Financial Group

Marriott Marquis, Times Square

New York, NY

This event will focus on the role of the consultant which is evolving into more than evaluating investment managers. The future of U.S. Equity investing will be a primary topic at the one day conference.  Focus will be on what the right amount to allocate to U.S. versus non-U.S. Investment equities and their associated risks

+March 17-19, 2014

National Association of State Treasurers (NAST) Annual Legislative Conference

Mandarin Oriental Hotel

Washington, DC

The National Association of State Treasurers is a professional, nonpartisan organization that provides a forum of the exchange of information in state finance.  In addition to the legislative conference NAST offers a variety of educational conferences throughout the year designed to assist state finance officials. These conferences provide NAST members with an opportunity to meet and discuss matters of mutual concern, as well as exchange information regarding best practices and innovative policies. Topics will cover broad economic policy issues, financial regulatory reform, tax reform, pension fund issues, legislative efforts on behalf of state 529 education savings plans, municipal bond issues, and the 2014 economic outlook.  The College Savings Plan Network (CSPN) is an affiliate of Nast

+March 22-26, 2014

Texas Public Employees Retirement System (TEXPERS) 25th Annual Conference

Renaissance Worthington

Fort Worth, Texas

The Texas Public Employees Retirement System is sponsoring their 25th Annual conference.  The primary goal is for trustees to receive educational information about investment options, fiduciary duties, governance, ethics, investment terms and practices, and actuarial and legal matters.  The Fort Worth conference offers and encourages attendees to participate in Saturday’s Trustee School. Many attendees use this training opportunity to become certified trustees.  Monday’s Plenary sessions feature a keynote presentation by Jack Uldrich, author of “Foresight 20/20: A Futurist Explores the Trends Transforming Tomorrow” providing in-depth information regarding pension and money management industries.  Concurrent sessions on various pension related topics will be the format for afternoon sessions throughout the conference.

+March 23-25, 2014

PA County Commissioners Spring Conference (PACC)

Hilton Conference Center

Harrisburg, PA

The County Commissioners Association of Pennsylvania is a statewide, nonprofit, bipartisan association representing the commissioners, chief clerks, administrators, their equivalents in home rule counties, and solicitors of Pennsylvania's 67 counties.  The County Commissioners’ Association of Pennsylvania (CCAP) and its member counties are committed to excellence in county government.  CCAP will advocates for and provides leadership on those issues that will enhance and strengthen the ability of county commissioners to better serve their citizens and govern more effectively and efficiently.  The Association strives to educate and inform the public, administrative, legislative and regulatory bodies, decision makers, and the media about county government.

+March 24-26, 2014

Georgia Association of Public Pension Trustee (GAPPT) Inaugural Trustee School

Macon Marriott City Center

Macon, GA

The Georgia Association of Public Pension Trustees is hosting its first Certified Pension Plan Trustee School with the aid and expertise of its dedicated service providers.  GAPPT is a nonprofit association formed solely to promote and support the education and development of the Trustees and Administrators of Georgia’s Public Pension Funds. Trustee Certification school is open to all members of GAPPT.  The two day program will be followed by an exam day.  The Curriculum is designed to deal with pension administration, investing, funding and actuarial topics.

Begin the steps required to become a Certified Public Pension Trustee by attending the 2014 Union and Taft Hartley Conferences

+March 9-12, 2014

Building and Construction Trades Legislative Conference (BCTD)

Washington Hilton

Washington, DC

Government Finance Officers’ Association Conferences

+March 5-7, 2014

North Carolina Government Finance Officers’ Association (NCGFOA)

Sheraton Imperial

Research Triangle Park, NC

+March 9-12, 2014

Oregon Municipal Finance Officers’ Association (OMFOA)

Sunriver Resort

Sunriver, OR

+March 11-13, 2014

Missouri City Clerks & Finance Officers’ Association (MoCCFOA)

Holiday Inn Executive Center

Columbia, MO

+March 21, 2014

Tennessee Government Finance Officers’ Association (TNGFOA)

Jackson, Tennessee

+March 28, 2014

Government Finance Officers’ Association of New Jersey (GFOANJ)

FEA Conference Center

Monroe Township, NJ

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Scott + Scott LLP is a nationally recognized law firm headquartered inConnecticut with offices in New York City, Ohio and California. The firmrepresents individual as well as institutional investors who have suffered from corporate stock fraud. Scott+Scott has participated in recovering billions of dollars and achieved precedent-setting reforms in corporate governance on behalf of its clients. In addition to being involved in complex shareholder securities and corporate governance actions, Scott+Scott also has a significant national practice in antitrust, ERISA, consumer, civil rights and human rights litigation. Through its efforts, Scott+Scott promotes corporate social responsibility.

Scott+Scott’s PT+SM System is the firm’s proprietary investment portfolio tracking service. Carefully combining the firm’s proprietary computer-based portfolio monitoring software with Scott+Scott’s hands-on approach to client  relations is a proven method for institutional investors and their trustees to successfully

  • Monitor their investment portfolios  
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  • Consider what level of participation any given situation requires   
  • Recover funds obtained on their behalf through investor litigation action  

To obtain more information about Scott+Scott’s PT+SM services or to schedulea presentation to fund trustees, fund advisors or asset managers, please contact:    David R. Scott + Toll Free: 800.404.7770     email: + UK Tel: 0808.234.1396