Banks brace for more foreign exchange rigging exposure as civil lawsuits emerge

From YAHOO! Finance –

“Class-action cases are expected to follow vast fines for manipulating currency benchmarks.

Banks are bracing for hundreds of millions of pounds in new claims for foreign exchange manipulation from class-action lawsuits triggered by last week’s vast market rigging fines .

Barclays, Royal Bank of Scotland and four other banks were ordered on Wednesday to pay $6bn (£3.84bn) by UK and US authorities.

The Barclays penalty represents the biggest bank fine in British history.

The regulators, detailing how traders gathered in chatrooms using monikers such as “The Cartel” and “Coiled cobra” to rig the $5.3 trillion-a-day currency market, also forced the banks to plead guilty to criminal charges.

Lawyers say that the fines, as well as an investigation from the European Commission, could be a springboard to damaging civil litigation in the UK and Europe.”

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The UK Has Quietly Rewritten Hacking Laws

From Bank Info Security -

“Prosecution Exemption Now Applies to Police, Spies. The British government rewrote the country's computer abuse law in March to shield law enforcement and intelligence agencies from being prosecuted for hacking.

But the action wasn't disclosed until May 14, when the government informed the civil rights group Privacy International - and seven Internet and communications service providers - about the revised hacking law in response to a hacking-related legal claim these organizations filed against a U.K. intelligence agency.

The legal claim was filed in February against the Government Communications Headquarters, or GCHQ. "The claimants asserted that GCHQ's actions were both unlawful under the Computer Misuse Act (CMA), which criminalizes hacking, and that there was not sufficiently detailed legal authority to make GCHQ's hacking 'in accordance with law,' as any violation of privacy is required to be by Article 8 of the European Convention on Human Rights," Privacy International says in a statement.”

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The hapless ways that foreign banks have tried to skirt US sanctions

From Quartz –

“The banter and slang used by traders can make it hard for outsiders to tell what they are doing, much less whether they’re up to no good. But there are telltale patterns and keywords that signal trouble—and systems that can sift through chat logs and transaction records looking for them.

Some of the more colorful expressions unearthed in recent investigations (for example, “Betty on the mumble,” where a betty is short for the British pound) come from investigations into market manipulation. But rigging the markets for interest rates, foreign exchange, and commodities, to name a few, is only one type of misdeed that have landed big banks in legal hot water of late. ‘

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U.K. Defeats ECB in Clash Over City of London Clearinghouses

From Bloomberg Business –

“Britain scored a rare victory in its bid to challenge European Union powers over the City of London as EU judges sided with the U.K. in a clash with the European Central Bank on clearinghouses.

The EU General Court in Luxembourg ruled Wednesday that the ECB lacks legal powers to dictate the location of the clearing of euro-denominated trades. It said the central bank would require a change in EU law to win those rights.

“This is a major win for Britain and a major win for all those who want to see a European economy that is both open and successful,” said George Osborne, the U.K.’s chancellor of the exchequer.”

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