The guilty pleas entered by four global banks for rigging the foreign exchange (forex) market and Libor interest rates could trigger a raft of further civil litigation, commercial lawyers said today.
Citigroup, Barclays, JPMorgan, RBS and UBS yesterday agreed to pay a record £3.7bn to US and British regulators after all but UBS admitted conspiring to manipulate the price of US dollars and euros exchange on the FX spot market. UBS admitted separate charges.
Simon Hart, banking litigation partner at City firm RPC said yesterday’s settlement could make it easier for pension funds and money managers to make claims against banks.
'There is already a lot of work going on behind the scenes assessing how claims could be brought forward and those potential claimants will be looking to today’s announcement for evidence to support their analysis.’
Andy McGregor, also a partner at the firm, said that a large number of FTSE 100 companies are likely to be investigating potential claims, and that if one large corporate pursues litigation, this could prompt industry-wide litigation against banks.
Anthony Maton, managing partner at Hausfeld, the firm that co-led counsel in the case against the banks in the US, said the guilty pleas were ‘only one side of this story’.
‘European regulators are also investigating these practices. There is no doubt that anyone who traded FX in or through the London market - and there is $5.3tn of business here every day - will have suffered significant loss as a result of the actions of the banks.’
The European Commission is close to ruling on whether the banks were guilty of anti-competitive conduct, with lawyers suggesting that any infringement could open up the potential for more claims in Europe.
Abdulali Jiwaji, partner regulation at financial services specialist Signature Litigation, said: ‘These fines are by no means the end of the story. Criminal and competition related investigations are ongoing.
‘While the larger institutions can comfortably absorb the financial penalties, significant actions against individuals are in the pipeline which will no doubt also provide ammunition for related civil claims.'