Daily Archives: January 28, 2015

Big banks fail to dismiss U.S. currency rigging lawsuit

A federal judge on Wednesday said U.S. investors may pursue a nationwide antitrust lawsuit accusing 12 major banks of rigging prices in the $5.3 trillion-a-day foreign exchange market.

U.S. District Judge Lorna Schofield in Manhattan rejected the defendants’ arguments that the case should be dismissed because of a lack of evidence that they colluded to manipulate the WM/Reuters Closing Spot Rates, known as the Fix, or that they impeded competition and caused harm.

“Fairly read, the U.S. complaint adequately alleges that defendants engaged in a long-running conspiracy to manipulate the Fix to defendants’ advantage,” Schofield wrote in a 30-page decision.

The bank defendants include Bank of America Corp (>> Bank of America Corp), Barclays Plc (>> Barclays PLC), BNP Paribas SA (>> BNP PARIBAS), Citigroup Inc (>> Citigroup Inc), Credit Suisse Group AG (>> Credit Suisse Group AG), Deutsche Bank AG (>> Deutsche Bank AG), Goldman Sachs Group Inc (>> Goldman Sachs Group Inc), HSBC Holdings Plc (>> HSBC Holdings plc), JPMorgan Chase & Co (>> JPMorgan Chase & Co.), Morgan Stanley (>> Morgan Stanley), Royal Bank of Scotland Group Plc (>> Royal Bank of Scotland Group plc) and UBS AG <UBSG.S>.

According to the 2013 lawsuit, these banks have held an 84 percent global market share in currency trading, and were counterparties in 98 percent of U.S. spot volume.

The lawsuit is separate from criminal and civil probes worldwide into whether banks rigged currency rates to boost profit at the expense of customers and investors.

In the complaint, investors including the city of Philadelphia, hedge funds and public pension funds accused the banks of having conspired since January 2003 in chat rooms, instant messages and emails to manipulate the Fix.

Read on.

Judge rules Fannie, Freddie lawsuits can continue

ohn Carney at the Wall Street Journal is reporting that a federal claims judge has ruled against the federal government, saying that a lawsuit brought by investors over the treatment of Fannie Mae and Freddie Mac can proceed.

Here’s the latest:

A judge in the U.S. Court of Federal Claims denied the government’s motion to stay proceedings in that court, according to two people familiar with the decision. Lawyers for the government had asked the Court of Claims to put the lawsuits on hold pending the appeal of a decision by a judge in the U.S. District Court for the District of Columbia that dismissed a similar group of cases last September.

Shares of Fannie jumped by more than 8% Wednesday morning. Shares of Freddie rose by more than 4%.

Wednesday’s decision means the plaintiffs, who include Fairholme Funds, will be able to continue to collect information from the government in hopes of bolstering their argument that the Court of Claims has jurisdiction over the cases.

Read on.

JPMorgan Reaped Up to $300 Million Gain On Swiss-Franc Turmoil

(Bloomberg) — JPMorgan Chase & Co.’s foreign-exchange traders reaped a gain of as much as $300 million after the Swiss central bank roiled markets by abolishing its cap on the franc, according to two people with knowledge of the matter.

The bank netted $250 million to $300 million on the day of the Swiss National Bank’s surprise decision to scrap the franc ceiling of 1.20 against the euro, said the people, who asked not to be identified because they weren’t authorized to speak publicly. A JPMorgan spokesman declined to comment.

The SNB’s surprise decision on Jan. 15 to remove the three-year-old cap sent the franc soaring as much as 41 percent against the euro that day. JPMorgan is one of the few to emerge from the turmoil with a profit. Citigroup Inc., Deutsche Bank AG and Barclays Plc suffered about $400 million in cumulative trading losses, people with knowledge of the matter have said.

Read on.

Illinois AG to look into Kendall family foreclosure

Monday, we told you the story of a Kendall family desperately working to save their house from foreclosure.

Tuesday, we learned that after our story aired, the Illinois State Attorney General’s Office contacted the family to say they’re investigating what happened to them. Two years ago, the family hired a Chicago law firm to get them out of foreclosure.

But now the firm has taken about $9,000 of their money and didn’t get a deal done. The law firm has since shut down their website and disconnected their phones.

Read on.

U.S. Scrutinizing Rabobank’s California Accounts

(Bloomberg) — The U.S. is investigating whether the Netherlands’ Rabobank Groep ignored signs of money laundering by clients at branches of its California banking unit near the Mexican border, according to people with knowledge of the matter.

The criminal investigation is being conducted by Justice Department prosecutors in Washington and the U.S. Attorney’s Office in San Diego, said two people who asked not to be identified because the inquiry is confidential. The probe could trigger additional enforcement action against Rabobank, which is still being monitored by the Justice Department after admitting wrongdoing in a 2013 settlement over interest-rate manipulation.

Read on.

BREAKING: DOJ, States Near $1.38B Accord With S&P

Law360, New York (January 28, 2015, 12:39 PM ET) — Standard & Poor’s Ratings Services will pay $1.375 billion to settle lawsuits brought by the U.S. Department of Justice and 20 attorneys general around the country over the firm’s ratings work leading up to the financial crisis, according to a person familiar with the matter.

The settlement is expected to be announced as early as next week, the person said. Details of the landmark accord, such as how the haul will be divvied up between authorities, could not immediately be confirmed.

An S&P spokeswoman declined to…

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WATCH: Famous televangelist Pat Robertson gives terrible reverse mortgage advice

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