A US-based law firm will announce plans on Monday to pursue legal action against the Eurozone’s biggest lender, Sky News learns.
The Eurozone’s biggest lender is facing fresh legal action over foreign currency trading practices that are alleged to have cost its clients millions of dollars.
Sky News has learnt that Scott +Scott, a US-based law firm, will announce on Monday that it is to pursue a claim in Europe against Deutsche Bank over its so-called ‘last look’ trades.
The practice involves traders exploiting a short time-lag between a client’s order being placed and executed, sometimes allowing banks to profit from the difference.
Barclays is among the companies which have found themselves in regulators’ cross-hairs over ‘last look’ trading, paying $150m (£121m) to authorities in New York in late 2015.
This week’s move by Scott+Scott will come three weeks after a judge in the US rejected Deutsche Bank’s attempt to have a similar ‘last look’ lawsuit dismissed.
That claim, brought by Axiom Investment Advisers, alleged that the German bank used algorithms to delay the processing of trades by several tenths of a second, allowing it to reject or alter the terms of those client orders if they were unprofitable for it.
‘Last look’ is one of the areas of foreign currency trading which has had huge swathes of misconduct exposed by regulators on both sides of the Atlantic.
Banks including HSBC, JP Morgan and Royal Bank of Scotland have paid billions of pounds to settle investigations and litigation during the last three years, although the UK’s Serious Fraud Office abandoned a probe into the multitrillion pounds-a-day market.
David Scott, managing partner of Scott+Scott, will say on Monday that malpractice involving ‘last look’ affected Deutsche’s clients globally, according to a person briefed on the contents of the announcement.
“We are looking forward to fighting Deutsche Bank in court over its wilful misconduct through the use of ‘last look’ and profiting at the expense of our clients,” he is expected to say.
“We intend to bring action in Europe on behalf of those who suffered their losses outside the US.”
Scott+Scott says it has secured more than $2bn in compensation from major banks for victims of malpractice in forex markets, and is continuing to pursue a number of claims relating to that and other financial benchmarks.
The development comes as Deutsche outlines plans to raise €8bn (£6.9bn) by selling new shares to investors, months after fears were raised about its ability to stay afloat in the face of mounting regulatory penalties.
A Deutsche Bank spokesman declined to comment on the ‘last look’ claim being pursued by Scott+Scott.