FX Settlements Strengthen Civil Law Suit in U.S.

FX Week
November 12, 2014

Gregory Asciolla discusses foreign exchange (FX) case antitrust settlements in the UK and U.S.

In a class action lawsuit against banks including Citi, HSBC, JP Morgan, Royal Bank of Scotland, and UBS, which addresses misconduct surrounding the WM/Reuters 4pm benchmark, Labaton Sucharow partner Gregory Asciolla discussed the inconsistency of the fines enforced by regulators. Greg noted it is very unusual for cross-jurisdiction regulatory authorities to announce settlements at the same time, and it is even more unique for five banks to announce simultaneously, let alone for the investigations to be completed so quickly.

In the UK, the Financial Conduct Authority, the Commodity Futures Trading Commission, and the Swiss Financial Market Supervisory Authority all announced their own settlements less than 18 months since the misconduct allegations were first reported.

Greg speculated there is a chance that, following these settlements with regulators, banks might decide to settle the U.S. class action lawsuit, although the chance of that happening is unlikely before the U.S. District Court for the Southern District of New York makes a decision on whether to accept or reject the banks' motion to dismiss the case.

"I would hope those defendants that have settled with authorities might turn their attention to how they can resolve the parallel class action in the US. For companies to come in prior to a motion to dismiss is rare, but I would hope someone might want to. Normally, defendants come in at different times during an investigation, but I can't comment on whether any banks have asked to settle now," he said.