A federal judge dismissed an antitrust suit filed by foreign exchange investors ("Plaintiffs") against sixteen banks ("Defendants") for allegedly causing indirect harm due to a currency-rigging conspiracy. The investors had purchased foreign currency from retail foreign exchange dealers ("RFEDs") and claimed they were harmed by the Defendants' alleged conspiracy to fix prices in the foreign exchange ("forex") market.
In the putative class action Complaint filed in the U.S. District Court for the Southern District of New York, the Plaintiffs sought to rely on the settlements reached by certain banks with DOJ in 2015 concerning the alleged manipulation of the forex market. Plaintiffs alleged that they were harmed because the RFEDs from whom they purchased currency had executed covering trades with the Defendants and charged Plaintiffs a mark-up that was inflated due to the alleged manipulation. The RFEDs also quoted the Plaintiffs exchange rates based on the rates in the spot market, thereby allegedly passing costs caused by the conspiracy of the Defendants to fix prices in the forex markets.
The Court ruled that the Plaintiffs failed to establish how and to what extent the alleged currency-rigging impacted the ultimate price the plaintiffs had paid to the RFEDs. The Court further found that the Complaint did not plausibly allege a causal chain between the Defendants' alleged conduct and any harm to the Plaintiffs. The Court also dismissed a claim for injunctive relief under the Sherman Antitrust Act because the Complaint established that the alleged misconduct ended in 2013.
While the Court granted Plaintiffs leave to amend their complaint, the Plaintiffs were cautioned that any motion for leave to replead must be consistent with the Court's opinion and could be denied if it did not specify how the amendment cured the deficiencies in the pleading.
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