Law360, New York (October 22, 2015, 4:10 PM ET) — Barclays PLC agreed to pay $384 million and HSBC Holdings PLC will pay $285 million as part of a broader, $2 billion settlement of claims that banks manipulated the global foreign exchange market, according to court documents filed Thursday.
The banks were part of a series of settlements that roped in a total of nine global financial institutions over the alleged manipulation of the $6 trillion foreign exchange market that was announced in open court in September. While settlement amounts for four of the banks involved in the deal were announced prior to September, the amount that Barclays, HSBC Holdings PLC, the Royal Bank of Scotland PLC,Goldman Sachs Group Inc. and BNP Paribas SA were to pay was not revealed when the settlements were announced.
RBS will pay $255 million and Goldman will pay $135 million, according to court documents.
Sources close to the case confirmed that BNP Paribas would contribute $115 million to the settlement in September, a number that was submitted to the court Thursday..
“We look forward to presenting these momentous settlement agreements to the federal court for approval, but our work is far from done,” David R. Scott, the managing partner of Scott & Scott LLP, lead counsel for the plaintiffs, said in a statement.
A representative for Goldman Sachs declined to comment. The other banks could not immediately be reached for comment.
JPMorgan Chase & Co. was the first bank to settle the litigation, agreeing to pay $99.5 million in January.
Since then, UBS AG, UBS Group AG and UBS Securities LLC settled for $135 million in March; Bank of America Corp. and Bank of America NA agreed to pay $180 million in April; and Citigroup Inc. and Citibank NA were required to pay $394 million in May. All except Bank of America were part of a broader, $5.6 billion settlement with U.S. and U.K. authorities in May.
Each of those settlements included a cooperation agreement.
“Given our in-depth knowledge based on our success against the banks in the US, Scott+Scott is gearing up to bring the action to Europe. Compensation figures today should serve as an indication of the scale of the potential European action as the U.K. FX market is almost double the size of that in the U.S.,” Scott said.
The plaintiffs allege that from as early as 2003 and through 2013, banks used multiple online chat rooms – with names like “The Cartel,” “The Bandits’ Club” and “The Mafia” – to communicate in code to avoid detection.
“Being a member of certain chat rooms was by invitation only, indicating the secret nature of this conduct,” the complaint says, adding that the chat rooms “replaced the classic smoke-filled backrooms of the past.”
The banks are accused of fixing prices by agreeing to widen the difference between the prices at which they buy and sell currency, manipulating benchmark rates, and exchanging confidential customer information in an effort to trigger client stop-loss and limit orders, according to court records.
And while the plaintiffs have already received around $2 billion in settlement payouts, more should be coming their way.
Morgan Stanley, Credit Suisse AG and Deutsche Bank AG have not settled from the original group of banks that were named as defendants in the litigation.
And Japan’s Bank of Tokyo-Mitsubishi, Canada’s RBC Capital Markets LLC, France’sSociete Generale SA and Britain’s Standard Chartered PLC were named defendants in July, bringing to 16 the number of banks that were ensnared in the litigation.
Those cases continue to move forward.