JP Morgan, Citi, and UBS named in class action lawsuit filed in Australia

Five major banks, among them Citigroup Inc, JP Morgan Chase, and Royal Bank of Scotland are facing a class action lawsuit.

The five also include Barclays Plc and Swiss banking group UBS AG.

The lawsuit was lodged on Monday in an Australian court, with the plaintiff seeking damages against the banking giants for their role in a foreign-exchange scheme.

Lawyers at Maurice Blackburn lodged the suit at the Federal Court claiming that the banks conspired to fix foreign exchange rates, a rigging plot that boosted the banks’ profits but affected local businesses and investors.

The banks are yet to respond to requests for comment, with RBS failing to do so because Monday is a public holiday.

Earlier this month, the European Union (E.U.) fined Citi group, JP Morgan, RBS, and Barclays a total of 1.07 billion euros (approximately $1.2 billion) after the regulator determined that the five lenders were complicit in the rigging plot.

UBS reportedly escaped the penalty as it had acted on the misconduct by informing E.U. regulators about how traders at these banks had been part of a conspiracy involving foreign exchange strategies.

Authorities acted after it was revealed that traders at the said banks had been using private chat rooms with names like, “The Bandits’ Club,” “The Cartel,” “The Mafia,” and “Three Way Banana Split”  to communicate amongst themselves.

Maurice Blackburn noted the insider traders used these forums to manipulate the FX benchmark rates, alter the prices of spreads as well as influence stop-loss and limit orders for clients.

The collusion was first revealed in 2013 but had begun in 2007. It triggered several regulatory probes in the United States, the United Kingdom and in Switzerland.

Since then, over a dozen financial institutions across the world have had to pay fines totaling to about $11.8 billion. More than $2.3 billion has also been used to compensate affected investors and other customers.

Maurice Blackburn’s lawsuit claims that many companies and investors from Down Under were hit the deliberate distortion caused in currency markets as a result of the activities of the five banks.

The action is, therefore, being lodged on behalf of Australian businesses and other customers who, between Jan 1, 2008, and October 15, purchased or sold foreign exchange worth more than $475,900.