A dozen large investors filed a joint lawsuit against 12 banks for allegedly conspiring to rig global foreign-exchange prices, according to a new consolidated complaint.
The class-action lawsuit, filed in U.S. District Court in the Southern District of New York late Monday, was from a group of investors across the U.S. and Caribbean, including city and state pension plans.
They accused the banks of communicating "with one another, including in chat rooms, via instant messages, and by emails, to carry out their conspiracy," and for rigging foreign-exchange rates as far back as January 2003, the lawsuit said.
Representatives for these banks either declined to comment or couldn't be reached.
The private lawsuits follow an international regulatory probe into the manipulation of currency markets and constitute the latest headache for several major banks that have been scrutinized for their conduct relating to everything from global interest-rate benchmarks to credit derivatives trading.
Big banks embroiled in the forex probes have suspended or fired more than 20 traders, mostly in New York and London. Earlier this month, BNP and BofA became the latest to suspend staff. The Bank of England has suspended a staff member relating to the probe.
The investors behind the consolidated lawsuit are: Aureus Currency Fund LP, a Santa Rosa, Calif., investment fund; the City of Philadelphia and its board of pensions and retirement; the Employees' Retirement System for the Government of the Virgin Islands; the Employees' Retirement System of Puerto Rico Electric Power Authority; Fresno County Employees' Retirement Association; Haverhill Retirement System for the city of Haverhill, Mass.; Oklahoma Firefighters Pension and Retirement System; State-Boston Retirement System; Tiberius OC Fund, a Cayman Islands fund; Value Recovery Fund LLC, a Delaware fund with offices in Connecticut; Syena Global Emerging Markets Fund LP, a hedge fund in Connecticut; and the United Food and Commercial Workers Union.
In the complaint, the investors accused the banks of controlling foreign-exchange rates via a "small and close-knit group of traders." They alleged it became possible for banks to rig the market because the traders "have strong ties formed by working with one another in prior trading positions" and by in many cases living "in the same neighborhoods in the Essex countryside just northeast of London's financial district."
"They belong to the same social clubs, golf together, dine together and sit on many of the same charity boards," the complaint adds.
All of the investors had previously filed individual claims in recent months, before their claims were consolidated into the group lawsuit.
The damages the investors are seeking were unspecified in the complaint.