Investment Giant BlackRock Sues 16 Banks Manipulating Foreign Exchange Markets

Investment Giant BlackRock Sues 16 Banks Manipulating Foreign Exchange Markets

Giant investment bank BlackRock is suing 16 banks from around the world, including Goldman Sachs, JPMorgan, and Citigroup. They’re accused of rigging foreign exchange markets (forex), colluding and sharing insider information to steal billions. 

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Forex Fiasco

The more than 200 page filing by legal firm Quinn Emanuel Urquhart & Sullivan reads, “By colluding to manipulate FX prices, benchmarks, and bid/ask spreads, defendants restrained trade, decreased competition, and artificially increased prices, thereby injuring plaintiffs,” boldly titling internal discussion platforms “The Cartel” and “The Mafia.” (Allianz Global Investors GMBH et al v Bank of America Corp et al, U.S. District Court, Southern District of New York, No. 18-10364).

Investment Giant BlackRock Sues 16 Banks Manipulating Foreign Exchange Markets

Trillions of dollars foreign exchange markets’ prices are being manipulated, according to the recently filed lawsuit, which was brought by giant investment bank BlackRock Inc. and Allianz SE’s Pacific Investment Management Co.

The culprits are 16 major banks: Bank of America, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan Chase, Morgan Stanley, Japan’s MUFG Bank, Royal Bank of Canada, Royal Bank of Scotland, Societe Generale, Standard Chartered, and UBS.

Looking Internationally as Well

BlackRock were part of another class action suit of a similar nature, which has yielded more than $2 billion in settlements. However, the two firms decided to opt-out of that arrangement (which have triggered another $10 billion in fines, and even criminal convictions) to go it alone in search of a larger pay day.

The present suit involves more than a dozen top banks accused of breaching U.S. antitrust law over a decade (2003 to 2013), essentially colluding on benchmark information, trading positions, and normally confidential orders.

Investment Giant BlackRock Sues 16 Banks Manipulating Foreign Exchange Markets

Reuters also reports the suit’s accusations could be picking up steam internationally. In addition to perhaps bringing legal action in Norway, “the plaintiffs plan to pursue similar litigation in London against many of the bank defendants with respect to trades in Europe.”

The Forex market is one of the most important, and is 27 times larger than traditional stock markets combined, moving nearly 5 trillion dollars daily. Last week another scandal regarding former Goldman Sachs bankers involved in a multi-billion embezzlement case with Malaysian funds rocked the banking world.

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