J.P Morgan to pay $99.5 million to resolve currency rigging lawsuit

J.P. Morgan Chase & Co, the largest US bank, agreed to pay $99.5 million to settle its portion of an antitrust lawsuit in which investors accuse 12 major banks of rigging prices in the $5.3 trillion-a-day foreign exchange market. Made public on Friday night, the settlement is the first in the nationwide litigation and resolved claims over J.P. Morgan''''s role in alleged collusion among banks since January 2003 to manipulate the WM/Reuters Closing Spot Rates, known as the Fix.
It followed the New York-based bank''''s agreements last November to pay roughly $1 billion in civil penalties to resolve related claims by US and European regulators. Investors including hedge funds, pension funds and the city of Philadelphia accused the 12 banks, which controlled 84 percent of the global currency trading market, of having impeded competition by conspiring to manipulate the Fix in chat rooms, instant messages and emails.
The J.P. Morgan settlement could form a basis for other settlements. It followed mediation with Kenneth Feinberg, a lawyer who also oversees General Motors Co''''s program to compensate drivers over faulty vehicle ignition switches. In an affidavit, Feinberg called the J.P. Morgan settlement fair, reasonable and adequate. "Although such analysis is preliminary, it does appear to be consistent with Class Lead Counsel''''s evaluation of J.P. Morgan''''s role in the FX market and J.P. Morgan''''s market share over the class period (6%)," he said. J.P. Morgan did not admit wrongdoing, and the settlement requires court approval. The bank did not immediately respond on Saturday to a request for comment. The other bank defendants include Bank of America Corp , Barclays Plc, BNP Paribas SA, Citigroup Inc, Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc, HSBC Holdings Plc, Morgan Stanley, Royal Bank of Scotland Group Plc and UBS AG. On Wednesday, US District Judge Lorna Schofield in Manhattan refused to dismiss currency-rigging claims against them. Five of those banks have also settled with regulators. The $99.5 million payment includes $500,000 for notices and administration. Lawyers for the plaintiffs, led by Hausfeld LLP and Scott & Scott, plan to seek legal fees of up to 30 percent of the settlement funds, court papers show. The case is In re: Foreign Exchange Benchmark Rates Antitrust Litigation, US District Court, Southern District of New York, No 13-07789.