Distribution plan proposed in partial Forex antitrust settlement

Last week, plaintiffs in the Forex antitrust settlement filed their proposal for distribution of the settlement funds. The Forex litigation is a consolidated antitrust case pending in the Southern District of New York with partial settlements totaling close to $2 billion dollars. Since not all of the 16 defendants in this case have settled, when all is said and done, total settlement dollars could be significantly larger.

Plaintiffs’ attorneys filed a distribution plan that will include notice by mail to investors and publicity in national and international publications, all driving investors to a website where they can submit claims. The proposal is subject to approval by U.S. District Judge Lorna G. Schofield, who is presiding over the case.

Settling Defendants
Bank of America
Barclays
BNP Paribas
Citigroup
Goldman Sachs
HSBC
JP Morgan
RBS
UBS
Non-settling Defendants
Bank of Tokyo-Mitsubishi UFJ
Credit Suisse
Deutsche Bank
Morgan Stanley
RBC Capital Markets
Société Générale
Standard Chartered

ForexThe Forex market is the largest and most actively traded financial market in the world, with $5.3 trillion in global trading volume on any given day. Half of that market is comprised of “spot transactions,” or the exchange of currencies between two parties at a specific date and time for a pre-determined value (e.g. Japanese Yen for US dollars). The defendant banks were the middlemen for these spot transactions, connecting those looking to convert US dollars to Japanese Yen with those looking to do the opposite. The banks quote a “bid” (or buy) price as well as an “ask” (or sell) price for a given currency. The difference between these two numbers is referred to as the spread. A smaller spread indicates a competitive Forex market. This case is alleges the defendants manipulated that spread to their advantage so they could take a larger cut of the ultimate transaction price.

What can investors do today to prepare for the Forex settlement?

Until the judge approves the distribution proposal, there’s no need to be concerned about imminent deadlines. You haven’t missed an opportunity to recover from this settlement or any Forex settlements to come. However, you may want to inventory your potentially eligible transactions now to lessen the future burden of pulling this information together once a deadline is established. We’ve found with many of our institutional investor clients that Forex transactions are not recorded as consistently or uniformly as debt or equity transactions, so it may be worth taking time now to assemble your Forex trades.

Contact FRT today for help assembling eligible trades or developing strategies for data querying. We have created several querying guides with likely search terms, which are available upon request.