CompCom, Investec clash
Knives have been sharpened in the battle between Investec Bank and the Competition Commission (CompCom) in the protracted forex rigging case against bank currency traders.
In July, Investec asked the Competition Tribunal for a declaratory order rendering the CompCom’s conduct in investigating 23 banks accused of forex rigging “vexatious and unreasonable”.
CompCom said if Investec’s order was granted, it would have extreme consequences for its ability to prosecute contraventions of the Competition Act.
The tribunal panel, led by Advocate Norman Manoim, is yet to make a decision on Investec’s request.
Advocate Avrom Krengel, acting for Investec, said in its August 17 affidavit that the bank and 22 others – among them Standard Bank of South Africa, Bank of America and Credit Suisse Group – have been prejudiced in the past 18 months.
Krengel said Investec had incurred “substantial unnecessary costs” since June 2017 as CompCom has missed its own deadlines to submit affidavits detailing specific incidents in which Investec allegedly entered into agreements with other traders to manipulate the rand-dollar currency pair.
CompCom found that from at least September 2007, banks had entered into an “unlawful overarching agreement” to rig trades involving the currency pair, which it estimated to have a $51 billion daily turnover.
About 36 individuals tied to 23 banks allegedly used the Reuters currency trading platform, Bloomberg instant messaging system, telephone conversations and meetings to coordinate their currency trading activities.
They allegedly posted fake bids and offers by customers wanting to purchase the dollar or rand to artificially boost bid prices and offers to book profits.
Investec said the “overarching agreement” CompCom was relying on was vague as it did not detail how it came into existence or was entered into, or when or how the bank created fake bids.
It added the commission changed its tune on the request for separate hearings of all banks and withdrew its supplementary affidavit into the case at the last minute in November 2017.
The commission is gunning for the banks to settle with it in its case and believes its prospect of success in opposing Investec’s order is high.