Last update: Sun, 07 Feb 2016 01am

J.P Morgan settles currency price rigging lawsuit in US

J.P. Morgan Chase & Co has become the first bank to settle a US antitrust lawsuit in which investors accused 12 major banks of rigging prices in the $5 trillion-a-day foreign exchange market. The settlement was disclosed in a letter filed on Monday with the US District Court in Manhattan from lawyers for J.P. Morgan, the largest US bank, and investors. Terms were not revealed. Settlement papers are to be filed with the court this month.

The accord requires court approval, and was reached after mediation with Kenneth Feinberg, who also oversees a General Motors Co program to compensate drivers whose vehicles had faulty ignition switches. The 2013 lawsuit is separate from criminal and civil probes world-wide into whether banks rigged currency rates to boost profit at the expense of customers and investors. J.P. Morgan was among six banks that in November reached $4.3 billion of settlements with US and European regulators.

In their complaint, investors including the city of Philadelphia, hedge funds and public pension funds accused the 12 banks of having conspired since January 2003 in chat rooms, instant messages and emails to manipulate the WM/Reuters Closing Spot Rates. They said traders would use such names as The Cartel, The Bandits' Club and The Mafia to swap confidential orders, and set prices through manipulative tactics such as "front running," "banging the close" and "painting the screen."

Other defendants include Bank of America Corp, Barclays Plc, BNP Paribas SA, Citigroup Inc , Credit Suisse Group AG, Deutsche Bank AG , Goldman Sachs Group Inc, HSBC Holdings Plc, Morgan Stanley, Royal Bank of Scotland Group Plc and UBS AG. According to the lawsuit, the 12 banks held an 84 percent global market share in currency trading, and were counterparties in 98 percent of US spot volume.

"The settlement is a responsible step by Chase in addressing its involvement," Michael Hausfeld, a lawyer for the investors, said in a phone interview. "It is a beginning with respect to the accountability of other banks engaged in the same trading." J.P. Morgan spokesman Brian Marchiony confirmed the settlement but declined further comment. Representatives for the other 11 banks declined to comment or did not immediately respond to requests for comment. Bank of America, Citigroup, HSBC, RBS and UBS also settled with regulators in November. The case is In re: Foreign Exchange Benchmark Rates Antitrust Litigation, US District Court, Southern District of New York, No 13-07789.

Copyright Reuters, 2015