(Bloomberg) – Credit Suisse Group AG was part of a “conspiracy ring” focused on rigging the foreign exchange market, a lawyer said during the opening of arguments in an antitrust action against the bank.
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Christopher Burke, who represents a group of plaintiff pension funds and other investors, told jurors on Tuesday that Credit Suisse and 15 other banks participated in online chat rooms in which they agreed on spreads. currency pairs from the end of 2007 to 2013.
“Chatrooms have given dealers an edge,” Burke said in Manhattan federal court, adding, “With the network, dealers win and customers lose.”
Credit Suisse is the only bank to be judged, which began on Tuesday after the jury was selected. The other banks, including Citigroup Inc., UBS Group AG, Barclays Plc, JPMorgan Chase & Co., HSBC Holdings Plc and Deutsche Bank AG, agreed to pay $2.3 billion to settle claims against them in 2017.
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Burke cited several examples of traders from different banks discussing spreads for currency pairs and said jurors should ask themselves why the banks weren’t competing against each other. “They know it was wrong. They did it anyway,” he said, noting that five banks, but not Credit Suisse, have pleaded guilty to criminal charges for the conduct.
Edward Moss, a lawyer for Credit Suisse, countered in the defense’s opening arguments that the plaintiffs were trying to connect “smaller isolated things” to allege a larger conspiracy that never existed.
“Were these isolated little things bad things?” Moss asked rhetorically. “Yeah, they were. There were people in this industry who did things they shouldn’t be doing. They want to put them together and say it’s a big massive thing. It does not work like that.
Instead, he likened the situation to separate groups of carpools on the Long Island Freeway encouraging their drivers to speed up.
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“Maybe it happens 70 times a day on the LIE that people are speeding up, a carpool here and a carpool here, but does that mean all the drivers on the LIE have a one-time deal to speed up?” Moss told the jury. “There will be no evidence that the government has prosecuted anything like this. The government pursued one carpool at a time.
Burke highlighted some of the chat messages sent by traders. “The days of clients holding us for ransom are over,” said one. Another said: “We should all unite. They need us more than we need them.
The lawyer said the chat rooms provide a “get out of jail” card to traders who encounter a disadvantageous spread, giving them the chance to agree on a fixed spread between banks.
The case is In Re Foreign Exchange Benchmark Rates Antitrust Litigation, 13-cv-7789, US District Court, Southern District of New York (Manhattan).
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