Earlier this month, some of the world’s biggest investment banks were found to have been involved in widespread foreign exchange manipulation by the regulatory authorities in the European Union. At the time, it came to light that some of the traders employed with the biggest names in investment banking had operated chat rooms in which they swapped information and rigged the market. Something on the same lines has now been unearthed in Australia, and it involved the same banks. The banks include Citibank, Barclays, JP Morgan, Royal Bank of Scotland’s subsidiary NatWest and UBS.
Just like it had been revealed in the proceedings in Europe, the modus operandi of the rogue traders was the same, and they corresponded through chat rooms to fix the foreign exchange market. Some of the names of the chat rooms were ‘the Mafia’ and ‘the Cartel.’ The banks worked in collusion to fix the foreign exchange rate, and the case that is being prepared is being brought by all those who have been harmed due to such practices. The class-action suit is going to involved businesses and also retail investors who lost money due to the rigging. The banks and their conduct with regards to the foreign exchange market rigging are also being investigated by the Australian Competition and Consumer Commission at this point.
The class-action suit in question is being brought by influential law firm Maurice Blackburn, and it could be announced soon. The money in damages that are being sought in the lawsuit is still unclear, but in a case of the same nature in the United States against 16 banks, the court awarded a settlement of $23.2 billion. The banks which are going to be slapped with the class action have already admitted to the guilt of their employees, and it remains to be seen how the lawsuit progresses. The rigging of the foreign exchange market in this way affects a range of businesses that are involved in exports or imports. Additionally, it can also be damaging for people who might have invested abroad.