RBS among banks facing class action over forex-rigging

● £1bn lawsuit filed in London relates to foreign exchange manipulation cartel

Royal Bank of Scotland (RBS) is one of five major institutions facing a class action lawsuit launched on behalf of thousands of pensioners and business customers who claim they collectively lost nearly £1 billion following the uncovering of a major foreign exchange manipulation cartel.

The civil lawsuit on behalf of pension funds, asset managers, hedge funds and corporate customers has been filed at the High Court in London against Barclays, Citibank, Jpmorgan and UBS as well as the Scottish bank.

The five banks, which are headquartered in the UK, US and Switzerland, have already admitted their participation in a cartel and their liability for it, after the European Commission ruled in May that EU competition law had been violated.

Fines equivalent to more than £6.9bn from 11 regulaers tors globally have already been handed out. The European regulator said that two cartels had been run on online chatrooms.

A similar lawsuit in the US led to a $2.3bn (£1.8bn) settlement and the UK action group is hopeful of a successful outcome in London.

Michael O’higgins, former chairman of the Pensions Regulator, who is spearheading the action, said: “The fines imposed on the banks by the European Commission were an important first step, but they will not compensate those who were damaged or suffered losses.

“Just as compensation has been won in the US, our legal action in the UK will seek to return hundreds of millions of pounds to pension funds and other corporates who were targeted by the cartel.”

Thecaseisnowwithlawfirm Scott+scott, which led the US action, and is being funded by international lawsuit funders Therium. Brought under the Consumer Rights Act 2015, the case will be one of the largest facing UK courts and covedinburgh-based UK resident investors and non-uk investors that participated in institutional foreign exchange trading.

UBS has managed to avoid fines from the European regulator in exchange for blowing the whistle on the cartel, but Scott+scott believes there is no reason for the bank to be exempt from the civil claims.

David R Scott, managing partner of Scott+scott, said the class action in the US led to widespread relief.

“Our experience with this litigation gives us a tremendous advantage in pursuing this case on behalf of victims in the UK and abroad so that they also receive fair and equitable compensation.

“Michael O’higgins’ experience in the pensions industry, which the banks specifically targeted, make him ideally placed to run this claim on behalf of this class.”

All of the banks declined to comment.

A class action is a legal procedure enabling a group or class of people with related legal claims to bring their claim to court together in one action.

RBS this Friday reports its first-half results.