In 2010, the Morrison decision effectively uprooted the ability to litigate cases involving foreign issuers in the United States courts. As a result, cases like VW, Petrobras and Tesco were brought in their respective jurisdictions, covering the securities traded on their local exchange; and only securities traded on a U.S. exchange (predominantly ADRs) were covered in the U.S.
With Antitrust litigation involving complex financial instruments – e.g. Forex, LIBOR, ISDAfix and other benchmark rate manipulation cases – a similar pattern has started to emerge. U.S. suits against investment banks, most headquartered outside of the U.S., have already recovered billions of dollars for investors, and we are now starting to see their counterpart actions filed in other countries. This potentially new trend could bode well for investors that were unable to establish a proper nexus to the U.S. and that were not made whole by the U.S. recovery efforts.
The FX Europe opportunity is a prime example where this class of investors could meaningfully recover. However, for these settlement attempts, eligible claims must not have been compensated by the US settlement and must also have a “European nexus” meaning the effort is most suited for investors domiciled in the UK/Europe.
|Counsel:||Strange & Butler Law Firm|
|Claims:||Price fixing; Unjust enrichment; Controlling and manipulating FX benchmark rates|
|Relevant Period:||2007 – 2013|
|Participation Deadline:||June 8, 2020|
In the U.S., numerous banks accused of manipulating the Foreign Exchange (FX) market settled antitrust class actions against them for $2.3B. Due to the 2010 US Supreme Court decision in Morrison, eligibility to share in the settlement was limited to FX claims with a ‘nexus’ to the U.S., meaning the investor, defendant bank, or trades were linked to this country. This left billions of dollars in uncompensated FX claims lacking the required U.S. connection.
In the UK, several ongoing efforts are seeking recovery for uncompensated FX claims with a UK or European nexus. These include at least one opt-in group action in the UK led by Quinn Emmanuel, as well as two class actions filed in that country’s Competition Appeal Tribunal (CAT) by the two law firms responsible for the U.S. settlement.
Actions Filed UK’s Competition Appeal Tribunal
- On July 29, 2019, the Scott & Scott law firm filed an action covering all persons who entered into relevant FX transaction sin the Europe Economic Area (EEA) during the period December 18, 2007 through January 31, 2019. Relevant FX transactions include spot and/or forward trades involving one/two of the G10 and the Danish Krone currencies. The class automatically includes all UK-domiciled claimants (unless they opt-out) and any claimants outside the EEA affirmatively opting into (joining) the Class.
- On December 11, 2019, the Hausfeld law firm filed a second class action similar to the first. The two UK class actions are going through a ‘carriage dispute’ – a proceeding similar to the selection of lead counsel in the US. Hearings on the carriage dispute and class certification are set for March 2021. We expect these and other challenges by the defendants will take years to resolve. This creates a window of time for you to try to settle your claims and, if not successful, your eligible claims will still be included in the UK class actions.
These two UK class actions are going through a ‘carriage dispute’ – a proceeding similar to the selection of lead counsel in the US. Hearings on the carriage dispute and class certification are set for March 2021. We expect these and other challenges by the defendants will take years to resolve. While the CAT is an unproven venture in the UK for passive claims recovery, if and when these cases are to reach a settlement, impacted investors would be able to file claims similar to how they would in a U.S. settled class action.
This creates a window of time for you to try to settle your claims and, if not successful, your eligible claims will still be included in the UK class actions.
Opt-In Group Action
- Strange & Butler, a U.S./UK based law firm specializing in Antitrust claims, is offering investors another potential route to recover for uncompensated FX claims with UK/European connections. The law firm is organizing settlement attempts in Europe to recover losses suffered by investors as a result of Foreign Exchange (FX) rate manipulation by certain banks between 2007 and 2013.
Most importantly, for these settlement attempts, eligible claims must not have been compensated by the U.S. settlement and must also have a “European nexus” – meaning:
- The claimant is based in UK/Europe; or
- The counterparty bank/branch was based in the UK/Europe;
- The FX order/transaction was placed or executed, or the instrument was entered into in the UK/Europe.
The recovery effort is aimed at your FX trades that were not compensated in the $2.3B US FX settlement. To the extent possible, the Organizer will assist you in excluding claims based on FX trades that have already recovered. These settlement attempts will be made on an individual and confidential basis directly with the implicated banks.
WHAT DOES THIS MEAN FOR INVESTORS?
For FX Europe, unlike the U.S. case, there has been no agreed upon settlement and no money sitting in escrow. While these settlement attempts may not be successful, there is no litigation involved and investors will not be bound by any action moving forward.
Nonetheless, even though the UK action(s) provide no guaranteed outcome, it represents why all investors should implement an automated Antitrust monitoring, filing and recovery program to ensure no potential opportunities are missed.
At this stage, you will need to provide your trade data so the Organizer can estimate your losses. If eligible, you will then need to sign the Organizer’s engagement letter with DBA.
Given its experience claim filing in the U.S. FX settlement, FRT can assist you in gathering trade records for the period 2007 through 2013. Where possible, FRT can also help you determine which trades were submitted for compensation in the US settlement.
- [Blog] Proposed Class Action for ‘Odd-Lot’ U.S. Corporate Bonds Offers Promise of Future Antitrust Payouts
- [Blog] Euroyen Case Update (April 2020): 2nd Circuit Reverses Court Decision to Dismiss Previous Suit
- [Blog] Lessons Learned from the First Settlement of the GSE Bonds Antitrust Case ($49.5M)
- [Blog] GSE Bond Case Update (December 2019): More Banks Settle Bringing Total Recovery to $386.5M
- [Report] A Primer on Antitrust Class Litigation
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