Three of Britain’s biggest banks are to pay £600 million compensation to victims of foreign exchange manipulations in the United States.
Barclays, HSBC and Royal Bank of Scotland agreed to the payouts at a US federal court hearing. Barclays is to pay $384 million, HSBC will pay $285 million and RBS will hand over $255 million. Goldman Sachs is to pay $135 million and BNP Paribas $115 million.
The settlement is the latest in a series of claims brought on behalf of multinational companies, pension funds and hedge funds which allege that they were penalised by the banks’ manipulation of foreign exchange markets.
Scott+Scott, an international law firm, filed the lawsuit that led to last night’s settlement and has similar legal claims pending against other banks.
Belinda Hollway, head of Scott+Scott in London, said: “We will soon be ready to bring an action against the banks in London. We have clients signed up across the UK, Europe and Asia, all of whom suffered substantial losses on their foreign exchange transactions as a result of manipulation by the banks.”
Her colleague Christopher Burke added: “Because the bulk of the market share in foreign exchange in the world takes place outside of the US, with London being the biggest market, I would expect that the numbers achieved outside the US might very well be larger.”
The settlements bring the total paid by banks this year to victims of forex manipulation to $2 billion. The largest was $402 million agreed by Citigroup and included UBS, the Swiss bank, which paid $141 million.
In addition to the compensation, the settlements require each bank to offer extensive co-operation and provide Scott+Scott descriptions of their actions, documents, witness interviews, depositions and trial testimony.
The settlements represent the latest development in the continuing scandal. In May six of the world’s largest investment banks, including Barclays and RBS, were fined about $5.7 billion by US regulators.
The banks pleaded guilty to rigging the $5.3 trillion-a-day global currency market for years. On top of a $4.3 billion settlement last November, the fines take the total levied against foreign exchange rigging to nearly $10 billion.