Investors have asked a New York federal court to give final approval to settlements amounting to slightly more than $2.3 billion in settlements resolving putative class claims that Bank of America Corp., Barclays Bank PLC, Citigroup Inc. and others rigged foreign exchange rates. The global banking giants faced claims they were part of a scheme to manipulate foreign exchange markets over an approximately six-year period.
As a result, settlements totaling $2,310,275,000 were reached with 15 of the 16 Defendant financial institutions. This is the third largest antitrust class action settlement ever achieved, according to the Plaintiffs’ filing. “Although government regulators and prosecutors have imposed fines and reached settlements with certain banks for FX-related misconduct, the 15 settlements here are the only ones that will return money to the victims of the misconduct,” the motion for approval says. Class members have responded positively to the settlements, according to the investors. The motion says:
As of January 12, 2018, no class member has objected to the settlements, and of the potential hundreds of thousands of class members only six entities with minimal trading volumes have requested exclusion.
The Defendants and their individual settlement amounts are: Bank of America, $187.5 million; Bank of Tokyo-Mitsubishi UFJ Ltd., $10.5 million; Barclays, $384 million; BNP Paribas SA, $115 million; Citigroup, $402 million; Deutsche Bank AG, $190 million; Goldman Sachs Group Inc., $135 million; HSBC Holdings PLC, $285 million; JPMorgan Chase & Co., $104.5 million; Morgan Stanley, $50 million; RBC Capital Markets LLC, $15.5 million; The Royal Bank of Scotland PLC, $255 million; Societe Generale, $18 million; Standard Chartered PLC $17.2 million; and UBS AG, $141,075,000.
The 15 settlements were negotiated separately, with Credit Suisse AG remaining the sole holdout among the banks included in the sprawling multidistrict litigation. In their motion for approval of attorneys’ fees, the investors say that although early settlements provided momentum and helped focus discovery efforts in the case, the work to prove a conspiracy among all of the Defendants was challenging. And although there were parallel government investigations, only some of the Defendants’ foreign exchange-related conduct was targeted. The lawyers are asking for $381 million in fees.
On behalf of all Plaintiffs’ counsel, the lead counsel asked the court to award 16.51 percent of the settlement fund – $381,353,830.27 – plus interest as attorneys’ fees, and also moved for the reimbursement of $22,495,669.73 in litigation expenses. The 16.51 percent cut sought for the class counsel is comparable to what’s been deemed fair and reasonable by other courts in “mega-fund” cases, according to the fee motion
The action, filed in 2013 amid regulatory investigations, accused major financial institutions of engaging in a scheme to rig the $6 trillion foreign exchange market from at least 2007 to 2013. In 2016, a first round of settlements was given preliminary approval by U.S. District Judge Lorna D. Schofield. In September 2017, she gave the court’s initial blessing to others, including, most recently, Deutsche Bank’s $190 million deal. The JPMorgan Settlement, announced in January 2015, “was an ice-breaker, motivating other Defendants to enter into negotiation,” according to the motion for final approval.
The cooperation from JPMorgan, and later UBS, helped to substantiate the conspiracy, which included collusion on pushing through trades just before or during the time when benchmarks are set, according to the investors, along with using chatrooms and other mechanisms to set rates.
Co-lead class counsel are Christopher M. Burke, Walter W. Noss, Kristen M. Anderson, Stephanie A. Hackett, David R. Scott, Joseph P. Gugliemo, Donald A. Broggi, Peter A. Barile III, Sylvia Sokol and Thomas K. Boardman of Scott & Scott Attorneys at Law LLP, and Michael D. Hausfeld, Bonny E. Sweeney, Reena A. Gambhir, Timothy S. Kearns, Nathaniel C. Giddings, Sarah R. LaFreniere, Michael P. Lehman, and Christopher L. Lebsock of Hausfeld LLP.
The case is In re: Foreign Exchange Benchmark Rates Antitrust Litigation, (case number 1:13-cv-07789), in the U.S. District Court for the Southern District of New York.