By Jonathan Stempel
NEW YORK (Reuters) – Deutsche Bank AG agreed to pay $190 million
to settle U.S. litigation accusing it of rigging prices in the
roughly $5.1 trillion-a-day foreign exchange market.
The German lender is the 15th of 16 banks to settle the private
investor litigation, for a total payout of $2.31 billion. Only
Credit Suisse Group AG has not settled.
Deutsche Bank’s preliminary settlement was detailed in filings on
Friday with the U.S. District Court in Manhattan, and requires a
judge’s approval. The bank denied wrongdoing.
Troy Gravitt, a Deutsche Bank spokesman, declined to comment, as
did Credit Suisse spokeswoman Nicole Sharp.
Investors accused banks of conspiring to manipulate key currency
benchmark rates, including the WM/Reuters Closing Spot Rates, or
the Fix, by sharing confidential orders and trade information to
coordinate their strategies.
Manipulation was allegedly done through chat rooms with such
names as “The Cartel” and “The Mafia,” and tactics known as
“front running,” “banging the close” and “painting the screen.”
The litigation followed worldwide currency-rigging probes
resulting in about $10 billion in fines for several large banks.
On Friday, the U.S. Federal Reserve fined HSBC Holdings Plc $175
million for failing to properly monitor currency traders.
Deutsche Bank’s settlement is the 5th largest in the investor
litigation, after settlements of $402 million with Citigroup,
$384 million with Barclays, $285 million with HSBC, and $255
million with Royal Bank of Scotland.
The investors’ law firms, Scott & Scott and Hausfeld LLP,
called the Deutsche Bank accord “more than reasonable” given that
the bank had “fewer indicia of liability” than others.
Other banks that settled are Bank of America, Bank of
Tokyo-Mitsubishi UFJ, BNP Paribas, Goldman Sachs, JPMorgan Chase,
Morgan Stanley, Royal Bank of Canada, Societe Generale, Standard
Chartered and UBS.
U.S. prosecutors have separately brought criminal charges related
to currency rigging against six traders.
One, Mark Johnson, who once led HSBC’s global foreign exchange
cash trading desk, went on trial this week in Brooklyn, New York,
on wire fraud and conspiracy charges.
The case is In re: Foreign Exchange Benchmark Rates Antitrust
Litigation, U.S. District Court, Southern District of New York,
(Reporting by Jonathan Stempel in New York; Editing by Tom Brown)