(27 May 2019 – Australia) Major investment banks including Barclays, Citi, JPMorgan, NatWest and UBS have been accused in an Australian class action suit of conducting an illegal foreign exchange (FX) cartel.
The global Banks are accussed of colluding using secret chat rooms to fix interest rates to their own financial benefit and detriment of market participants, including small businesses and large corporates. Maurice Blackburn is announcing the class action against the banks in the Australian Federal Court for an as yet undisclosed sum, however a similar claim in the US resulted in a US$2.3 billion settlement. The class action is open to any FX customers who bought or sold currency through Spot FX or FX Forwards between 2008 and 2013 with a transaction total value of over A$500,000.
The Australian Competiton and Consumer Commission (ACCC) recently launched an inquiry into collsuive FX dealing practices in Australia. The claim relies on findings from preceding international regulatory investigations and admissions made by accussed banks during those deliberations. Barclays, Citi, JPMorgan and RBS were fined US$1.2 billion as a result of those cases while UBS was not fined due to immunity status sought by self-reporting dealers cartel activity to regulators. Global banks have incurred US$12 billion in fines since first exposing the FX dealing scandal in 2013.
Small business owner J. Wisbey and Associates is the lead plaintiff for Maurice Blackburn's claim, an importer of dental and medical equipment. “Australian businesses shouldn’t pay more because the banks got together to work out how to make more profits for themselves. It’s hard to take individual action against this kind of price rigging because the price increases are small, but when repeated over thousands of transactions they make a real difference to currency prices. I rely on forex trading because my business needs to trade with international companies, but to have been subjected to an uneven playing field and paying an inflated price for no good reason, well that’s just unfair and hurts Australian businesses like mine” Managing Director Greg Wisbey stated.
“Australian businesses and investors, particularly medium to large importers, exporters, institutional investors and businesses with operations overseas, have been affected by the distortion of the FX market by these banks. Such cartel behaviour cheats Australian businesses in circumstances where they may already have been vulnerable to currency fluctuations” added Maurice Blackburn principal lawyer Kimi Nishimura.