The parties within the FX benchmark rate fixing case, the one targeting the biggest banks the world has to offer like Citi, JPMorgan, HSBC, and UBS, have once again clashed regarding discovery.
New Disagreements Evolving
A letter that was submitted on the 21st of August, 2020, at the Southern District Court of New York, has revealed that one of the points of disagreement between the defendants and plaintiffs is information. In particular, information the plaintiffs are seeking from HSBC.
The case itself has the plaintiffs, which in this case is a putative class of end-user businesses and consumers, alleged to have paid inflated forex exchange rates. This is due to an alleged conspiracy among the top banks of the world in order to fix the prices of FX benchmark rates. Back in June of this year, the Court had allowed the plaintiffs to serve interrogatories on HSBC in regards to a deal it had made with the US Department of Justice (DoJ) back in 2018.
A Bit Of A Scandal
In January of 2018, HSBC Holdings plc (HSBC) entered a deferred prosecution agreement (DPA) and agreed to pay out $63.1 million in criminal penalties, as well as $38.4 million in disgorgement and restitution. This was to resolve charges that it had engaged in a scheme to defraud two bank clients, planning to do so through a multi-million dollar scheme commonly called “front-running.”
As per the admissions of the UK banks, traders within its foreign exchange desk had misused confidential information that was provided to them on two separate occasions in 2010 and 2011. This information was provided to them by clients who hired HSBC to execute a multi-billion dollar forex transaction that involved the British Pound Sterling.
After confidentiality agreements were made with its clients, mandating the bank to stay quiet about the details of the planned transactions, the traders of HSBC’s foreign exchange desk transacted in the Pound Sterling. They did so for the benefit of HSBC in its “proprietary” accounts, as well as the traders themselves.
Refusing All Information
These traders then made these large transactions in such a way as to benefit HSBC by the movement of the Pound Sterling, harming its clients in the process. They even showed misrepresentations to one of the clients in order to hide the nature of the actions.
The HSBC had objected and refused to provide any information about the matter whatsoever, which had resulted in displeasure from the plaintiffs. HSBC had failed to make any substantial grounds as to the refusal of the matter, as well.
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