FRT Insights


FX Case Update (March 19, 2018): Understanding the potential downside of “Option 1”

Mike Lange, Securities Litigation Counsel, Financial Recovery Technologies

The deadline for filing claims in the $2.3 billion FOREX settlement was just extended (from March 22 to May 16, 2018 – read our blog). Ultimately, the size and complexity of the required data, which is being sourced from multiple entities, has been greater than the court and claims administrator initially anticipated.

Because of its size and complexity, even with the revised deadline, many firms are still scrambling to decide whether and how to submit. Some may simply opt for the administrator’s estimate of their losses (i.e. Option 1). This could prove a costly choice.

Under the settlement, claimants have two filing options:

  • Option 1: accept the administrator’s estimate of their eligible trades and losses; or
  • Option 2: submit their trade data for a more accurate determination of eligible trades and losses.

While Option 1 is easy, there are numerous reasons why the administrator’s estimates could significantly understate true losses and claim value. Below are a few we’d like to highlight:


Many FRT clients have received dozens, hundreds and in some cases thousands of notices and claim forms. Yet some have not received them for funds they know to be eligible. Without the unique login credentials contained in the notices, they cannot access the administration site to elect Option 1. Clients may not have received notices because, as detailed below, the administrator may not have sent them or if it did, they may have been mis-delivered or failed to reach the right persons at their organization.


Eligible losses will be based on trade volumes and under Option 1 the administrator will determine volumes using customer records provided by the settling defendants. Those records have known gaps, particularly in earlier years, requiring the administrator to extrapolate volumes for those time periods which may differ from your actual volumes.


If the settling defendants’ records don’t connect you and your trades, the administrator won’t include them when calculating your eligible trade volumes, or will heavily discount them if it’s not clear the trades were with a settling defendant. For example, this will happen if you:

  • Traded with Credit Suisse, the lone non-settling defendant, whose records will not be available to the administrator;
  • Transacted in exchange traded instruments which will not be available to the administrator;
  • Traded through a third party, like a prime broker or investment/asset manager, as the settling defendants’ records will reflect their names, not yours; or
  • Traded using electronic communications networks (ECNs), as these won’t always identify whether your counter-party was a settling defendant.


Given the enormous volume of trade data, errors can occur in even the best administration. We’ve seen other cases where claim forms were sent to the wrong entities or addresses. Some claimants may be mis-identified as domiciled outside the US. This is important as non-US domiciled claimants must show an additional ‘nexus’ or connection between their trades and the US in order to be included; so erroneous domicile determinations can result in eligible trades not being counted by the administrator.


With the deadline quickly approaching, it’s essential to identify all accounts you think might have eligibility, identify any for which you don’t have notices and log-in credentials, and ensure that you are in a position to elect Option 1 before the deadline. In addition, pulling your data will not only assure that all accounts that need an Option 2 filing will have the most cohesive filing possible, but also provide clients who file Option 1 a way to cross-reference, analyze and potentially challenge the Claims Assessment Notification to ensure they receive the largest possible recovery.

Learn More

If you are uncertain whether or not you should file Option 1 or Option 2, we can help. Please reach out to your account manager or email us at

About FRT


Founded in 2008, Financial Recovery Technologies (FRT) is the leading technology-based services firm that helps the investment community identify eligibility, file claims and collect funds made available in securities and other class action settlements. Offering the most comprehensive range of claim filing and monitoring services available, we provide best-in-class eligibility analysis, disbursement auditing and client reporting, and deliver the highest level of accuracy, accountability and transparency available. For more information, go to

This communication and the content found by following any link herein are being provided to you by Financial Recovery Technologies (FRT) for informational purposes only and does not constitute advice. All material presented herein is believed to be reliable but FRT makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Opinions expressed in this communication may change without prior notice. Firms should always seek legal and financial advice specific to their unique situation and objectives.

Search Tags

Subscribe to FRT's Monthly Newsletter

Get a monthly update with the latest industry developments related to U.S. Settled, non-U.S. opt-in, global passive and antitrust actions and recovery opportunities


Our Authors

avatar for Colin HolmesColin Holmes

Associate Counsel

avatar for Jenn RothenbergJenn Rothenberg

VP of Marketing

avatar for Kevin FlanaganKevin Flanagan

Marketing Manager

avatar for Matthew BaradMatthew Barad

Paralegal Data Specialist

avatar for Mike LangeMike Lange

SVP, Worldwide Litigation

avatar for Rob AdlerRob Adler

Chief Executive Officer

avatar for Sean CooksonSean Cookson

Vice President and Managing Director - APAC

Latest News