JPMorgan Chase & Co. (JPM) agreed to settle a portion of the antitrust lawsuit filed against it on allegations that it manipulated the foreign exchangemarket.
JPMorgan is one of the global banks accused of manipulating the foreign exchange market by regulators in the United States and United Kingdom. It had been reported that the banks are facing fines to the tune of multi-billion dollars.
Carlson Capital's Black Diamond Arbitrage Partners fund added 1.3% net fees in the first quarter of 2021, according to a copy of the firm's March 2021 investor update, which ValueWalk has been able to review. Q1 2021 hedge fund letters, conferences and more At the end of the quarter, merger arbitrage investments represented 89% of Read More
JPMorgan is the first bank to settle
JPMorgan is the first bank to settle the foreign currency manipulation charges. Market observers believed that the bank’s move could add pressure to its peers facing similar allegations.
A number of investors including hedge funds, public pension funds and the city of Philadelphia alleged filed an antitrust lawsuit against a dozen of banks including JPMorgan Chase, Bank of America Corp (BAC), Goldman Sachs Group Inc (GS), Barclays PLC (BCS), Deutsche Bank AG (DB) and Morgan Stanley (MS) among others.
Claims against JPMorgan and other banks
The investors claimed that banks colluded in manipulating the prices of the foreign exchange market since January 2003. They claimed that the traders of the banks used chat rooms, e-mail and instant messaging to work together in rigging the foreign currency rates.
JPMorgan’s court filing did not disclose the terms of the settlement. A related report from Financial Times indicated that the bank agreed to pay around $100 million to settle the allegations of U.S. counterparties, market participants and others based on information familiar with the matter.
According to CNBC, the lawyers of the bank and plaintiffs indicated in a letter to the court that they will submit the settlement agreement by the end of this month.
JPMorgan concludes its involvement in the U.S. civil class action lawsuit. The bank is still facing two other civil action cases related to the alleged foreign exchange manipulations. The Department of Justice is still investigating the bank’s foreign exchange practices.
A responsible step
In a telephone interview with Reuters, Michael Hausfel, the lawyer representing the investors said, “The settlement is a responsible step by JPMorgan Chase in addressing its involvement in the forex trading. It is a beginning with respect to the accountability of other banks engage in the same trading.
JPMorgan Chase already paid $660 million in penalty as part of the $4.3 billion settlement with six banks to settle the global investigations of regulators in the United Stes, United Kingdom and Switzerland related to the foreign currency exchange manipulation allegations.
The stock price of JPMorgan Chase & Co. (JPM) declined more than 3% to $60.55 per share today.