Five Noteworthy Banks (JPMorgan, Citi, Barclays, UBS and RBS) Slapped with a Lawsuit in Australia
Five highly reputed banks in the world, including Citigroup, Barclays, RBS, JPMorgan Chase and UBS have been dragged to court in Australia for allegedly rigging foreign exchange prices between 2008 and October 2013, in a bid to boost their profits after the financial crisis, according to reports on May 27, 2019.
Filthy Centralized Financial Institutions
While several proponents of traditional financial institutions like Warren Buffett, Nouriel Roubini, and others still see the cryptospace as an ecosystem filled with fraudsters, drug dealers and money launderers, the banking system has again proved that it is even worse than the burgeoning cryptospace.
According to a report by The Block, five banks including, Citigroup, Barclays, RBS, JPMorgan Chase and UBS are all facing a class action lawsuit in crypto-friendly Australia for allegedly manipulating forex prices between 2008 and 2013 in a bid to survive the global financial crash and remain profitable.
Reportedly, the heavyweight financial institutions were able to perpetuate the crime via direct communication in chat rooms with “colorful names including “The Mafia,” “The Cartel,” and “The Bandits Club.”
Investors Drag Banks to Court
After so many years of trying to bear the loss and act as if nothing really happened, the affected investors and businesses have decided to take the bull by its horns by filing a class action against the dragons at the Federal Court via a law firm called Blackburn Lawyers.
Per the law firm, the class action lawsuit is on behalf of investors and businesses who bought or sold more than AUD 500,000 ($347,00) of foreign currency between January 1, 2008, and October 15, 2013.
Commenting on the matter, Kimi Nishimura, the Principal Lawyer of Maurice Blackburn reiterated that a vast array of businesses, as well as investors and medium to large importers and exporters, have been badly affected by the unlawful practice of the five banks.
“Australian businesses and investors, especially medium to large importers, exporters, institutional investors and companies that have operations abroad, have been adversely invested affected by the distortion of the foreign exchange market by these lenders. Such an unlawful act cheats Australian businesses in circumstances where they may already have been vulnerable to currency fluctuations.”
It’s worth noting that this is not the first time financial institutions are being dragged to court for manipulating benchmark foreign exchange rates.
Earlier in 2013, Bloomberg revealed that some top lenders had manipulated forex rates. The report triggered a serious regulatory probe in the United States, the U.K., and even Switzerland. According to Bloomberg, more than a dozen financial institutions across the globe, have paid roughly $11.8 billion in fines and penalties, with about $2.3 billion spend in customer compensations.
Banks like JPMorgan, Citigroup, RBS, and Barclays have pleaded guilty to charges of market manipulations in the past, while three British traders, collectively known as “The Cartel,” were acquitted by a U.S. federal court last year of coordinating trades via chat rooms.