The lawsuit has not yet been certified as a class action but the judge has already approved settlements totalling $107 million that have been reached by the plaintiffs with 13 of the defendants, which include banking giants such as Bank of America, Citibank, BNP Paribas, Barclays, HSBC, UBS and Goldman Sachs.<\/p>\n
LIUNA\u2019s pension fund is leading a $1 billion court fight against some of the world\u2019s largest financial institutions over an alleged decade-long conspiracy to rig foreign currency markets.<\/p>\n
The Labourers\u2019 Pension Fund is one of two lead plaintiffs in a proposed class-action lawsuit that follows in the wake of similar actions already settled in the U.S. and Europe.<\/p>\n
The lawsuit has not yet been certified as a class action but the judge in the case has already approved settlements totalling $107 million that have been reached by the plaintiffs with 13 of the defendants, which include global banking giants such as Bank of America, Citibank, BNP Paribas, Barclays, HSBC, UBS and Goldman Sachs.<\/p>\n
The settlements reached to date are reportedly the second-highest amount ever recovered in a Canadian case related to price fixing.<\/p>\n
Royal Bank of Canada, Credit Suisse, Morgan Stanley and Deutsche Bank are the four defendants that have so far not agreed to settle.<\/p>\n
Tens of thousands of Canadians could be eligible to participate in any eventual settlement, according to one of the lawyers representing plaintiffs in the case.<\/p>\n
Proposed members of the class action include anyone who participated in a wide range of foreign exchange-related transactions either directly or indirectly through mutual funds, hedge funds, equity funds and pension funds between 2003 and the 2013.<\/p>\n
The plaintiffs are seeking $1 billion in damages plus punitive damages.<\/p>\n
\u201cLIUNA is not only standing up for its members, as they always do, but they\u2019re standing up on behalf of everyone who\u2019s affected by this misconduct,\u201d said Robert Gain, one of the lead lawyers for the plaintiffs.<\/p>\n
LIUNA\u2019s pension fund includes 20,000 pensioners and beneficiaries. The Hamilton-based union represents about 100,000 workers and retirees in Canada.<\/p>\n
\u201cThis is a global conspiracy to fix the price of currencies,\u201d said Gain, who is with the Toronto-based Koskie Minsky law firm.<\/p>\n
\u201cThat goes to the heart of a lot of financial instruments, it goes to the heart of the trust people have in the global banking system.\u201d<\/p>\n
The misconduct alleged in the Canadian lawsuit has already led to massive settlements and fines against some of the defendants elsewhere in the world.<\/p>\n
Six of the major financial institutions were hit with a total of $4.3 billion (U.S.) in fines in 2014 for the attempted manipulation of foreign currency rates. In just the U.S. alone, Citibank reached a $402 million (U.S.) settlement with American regulators as well as being hit with a $310 million (U.S.) fine.<\/p>\n
Despite the massive fines levied against the banks around the world, Gain said there are no similar investigations or enforcement actions being taken by Canadian authorities.<\/p>\n
The Canadian class action lawsuit alleges that the defendant banks conspired with each other over a 10 year period to manipulate more than two dozen currencies through a variety of means, such as fixing the price of bid and ask spreads and manipulating benchmark rates for currencies.<\/p>\n
According to the allegations, the financial institutions used multiple chat rooms with names such as \u201cThe Cartel,\u201d \u201cThe Bandits\u2019 Club\u201d and \u201cThe Mafia\u201d to communicate with each other.<\/p>\n
The lawsuit alleges the banks conspired to fix spot prices of the futures market, as well as exchanged confidential customer information that could be used to trigger certain trading reactions.<\/p>\n
None of the allegations have been proven in court.<\/p>\n
Lawyers for the plaintiffs were unsuccessful last year in an attempt to add TD Bank and BMO as defendants in the proposed class action. That decision is being appealed.<\/p>\n
Bank of America, BNP Paribas and UBS were the first three banking groups to reach settlements in the Canadian case and as part of the settlement, they agreed to co-operate with the plaintiffs in the prosecution of those banks that don\u2019t agree to settle.<\/p>\n
A formula for paying out the current settlements has not been finalized but payouts are expected to be roughly proportional to the financial impact suffered by the affected parties.<\/p>\n
LIUNA\u2019s pension fund does not gain any additional financial benefit by virtue of its role as one of the lead plaintiffs.<\/p>\n
It\u2019s not known how much LIUNA\u2019s pension fund can expect to recover from the settlement. A spokesperson for LIUNA did not respond to a request for comment.<\/p>\n","protected":false},"excerpt":{"rendered":"
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