In the latest banking scandal since PPI, Swaps and Libor, a large onset of litigation is expected against five major banks amongst others following a recent decision by the Financial Conduct Authority (FCA) to fine the banks for rigging the £3.4trn-a-day foreign exchange market (Forex). The foreign exchange market is a global decentralized market for the trading of currencies.
The Forex is not renowned for being easy to manipulate but there is scope for experienced traders to change a currency’s value in order to make a healthy profit. Traders possess clever techniques which can alter the market’s impression of both supply and demand and consequently reflect a change in price.
Recent years have witnessed an increase in such techniques at the hands of the banks and other experienced traders. Tactics can involve collusion, sharing of confidential information and submission of a raft of orders during the window when the fix is set. Such price shifts involve very fine margins so holidaymakers will largely be unaffected when purchasing foreign currency however there will be far-reaching detrimental implications for the more specific Forex market participant.
An integral ingredient to bringing a successful action will be to illustrate that the bank behaved in such a way as to have profited at the expense of the customer. The FCA’s recent ruling has drawn attention to the deliberate manipulation of the system by the banks to the detriment of certain clients and other market participants. The FCA findings have referred to specific examples of collusion between traders at different banks using online messaging. There have also been concerning reports of traders congratulating themselves for producing hefty profits and obtaining lucrative results.
The legal sector is anticipating a much higher volume of cases as a result of the Forex manipulation than was the case under the recent Libor scandal. The initial suggestions are that it will be much easier for market participants to illustrate that they have lost money as a direct result of the banks’ conduct. This is the latest scandal to undermine the trust in the financial system which has been in the press for largely the wrong reasons in recent years.
Here at Farleys we are experts at dealing with such manipulation of the Forex by the banks and traders. We have recently acted for both national and international clients. If you have been affected by any of the above issues or would like to speak to one of our specialist solicitors then do not hesitate to contact us today for expert advice on the grounds for bringing a successful claim. To speak to a Farleys solicitor who specialises in Commercial Litigation please call 0845 287 0939 or alternatively you can email us.