Five banks named

RBS and Barclays facing £1bn lawsuit over alleged forex rigging

RBS Gogarburn

Gogarburn: now facing a class action (pic: Terry Murden)

Royal Bank of Scotland and Barclays are among five banks facing allegations of rigging the foreign exchange market in a class action claim by investors understood to be in excess of £1 billion.

US giants JP Morgan and Citigroup and the Swiss Bank UBS are also named in the suit filed on Monday with the UK’s Competition Appeal Tribunal (CAT) alleging that they broke competition laws by unlawfully manipulating the foreign exchange market between 2007 and 2013.

It is being led by Michael O’Higgins, former chairman of the Pensions Regulator, and is being funded by litigation finance group Therium.

Mr O’Higgins told the Reuters news agency that the total value of the claim would depend on the number of foreign exchange trades executed in London and the proportional impact of the rate rigging.

David Scott of the law firm Scott+Scott which is bringing the action said it was a “perfect” case to be brought as a so-called “opt-out” collective class action for breaches of UK or European Union competition law.

He added: “It is a very difficult case to put together individual damages which are significant enough.”

The class action suit comes after all of the banks except UBS were fined a total of €1.07bn (£936m) in May, for taking part in foreign exchange trading cartels dubbed “Three Way Banana Split” and “Essex Express”.

The European Commission handed out the penalties relating to collusion over trading in 11 currencies dating back more than a decade.

RBS is likely to face questions about the claim when it unveils half year figures on Friday.

It is thought departing chief executive Ross McEwan will underline progress in trading performance with a £3.5bn dividend and buyback “bonanza”.

Ian Gordon, a banking analyst at Investec, forecasts a 9p dividend for the first half, a yield of 7.5% “which would make RBS the biggest dividend payer in the UK banking sector”.

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