Court dashes Credit Suisse hopes for swift end to Forex market price fixing lawsuit
Credit Suisse has failed to secure summary judgment in a lawsuit alleging conspiracy, or conspiracies, among banks to fix prices in the Forex market. On February 1, 2022, Judge Lorna G. Schofield of the New York Southern District Court dashed Credit Suisse’s hopes for a swift end to the lawsuit by denying its motion for summary judgment.
In this case, a class was certified on two issues: (1) the existence of a conspiracy to widen spreads in the FX spot market and (2) participation in the conspiracy by Defendants Credit Suisse Group AG, Credit Suisse AG and Credit Suisse Securities (USA) LLC.
The CS Defendants moved for summary judgment on the basis that there is no single conspiracy or that the CS Defendants did not participate in such a conspiracy. Plaintiffs cross-moved for summary judgment on the basis that there is a conspiracy and the CS Defendants participated in it.
The Opinion & Order, seen by FX News Group, nixes the motions for summary judgments of both the plaintiffs and Credit Suisse.
In this action, Plaintiffs sued sixteen defendant banks, which are among the world’s largest banks engaged in trading in the FX market.
In late 2006 and early 2007, FX traders who worked for different Defendants began using Bloomberg and Reuters chat rooms to communicate with each other. FX traders continued using chat rooms to communicate with traders at other banks through 2012 and 2013. FX traders discussed bid-ask spreads for various currency pairs in the chat rooms. Chat rooms could exist for years, and some traders communicated with other traders daily in the course of their employment.
At least one trader, from Barclays, participated in five chat rooms, which provided him access to traders from ten other banks. Because individual traders participated in multiple chat rooms, eight chat rooms connected employees of all sixteen Defendant banks. At least some FX traders sometimes asked about the same spread simultaneously in different chat rooms.
Some banks, including Credit Suisse, encouraged their employees to use interbank chat rooms and discuss bid-ask spreads in those chat rooms.
Fifteen of the sixteen banks have settled with Plaintiffs, paying over $2.31 billion, one of the largest antitrust settlements in the Sherman Antitrust Act’s 125-year history. The fifteen banks settled after filing motions to dismiss. In the case of each bank, the final order approving the settlement included a term barring claims for contribution or indemnification against the settling banks for any amounts awarded in this or any other action by way of settlement, judgment or otherwise.
Credit Suisse moved for summary judgment on the basis that there was no “single conspiracy” to widen spreads in the FX spot market. Tellingly, it does not directly argue that no conspiracy existed.
The Court concluded that neither party is entitled to summary judgment on the issue of Credit Suisse’s participation in the purported conspiracy because the scope of the conspiracy or conspiracies is disputed. The question of whether or not there was a single conspiracy or multiple conspiracies needs to be resolved before asking whether and what Credit Suisse joined. However, there is uncontroverted evidence that Credit Suisse participated in at least some conspiratorial conduct in the FX market, and CS Defendants do not argue that, even if there was a conspiracy, they did not participate in it.
The Judge notes that Credit Suisse erroneously argues that they could not have participated in a single global conspiracy because “there is no evidence suggesting that anyone was aware of . . . some enormous worldwide scheme.”
This argument attempts to inject a new requirement for the proof of a conspiracy — that a conspirator understood the full scope of the conspiracy. The law of this Circuit is not so exacting, the Judge explained. Instead, a conspirator need only know of a conspiracy’s “general nature and extent” to have joined it. One need not have full knowledge of all the details of a conspiracy or its scope to be a member.
The lawsuit continues at the New York Southern District Court.