FX Fixing Scandal: RBS Bankers Fight Market Manipulation Class Actions

The Royal Bank of Scotland has revealed that an unspecified number of bankers are defending themselves against three lawsuits, which claim that they sought to manipulate foreign exchange rates.

RBS said the defendants filed motions to dismiss the complaints in the three class actions.

"Certain members of the group, as well as a number of other financial institutions, are defendants in a consolidated antitrust class action on behalf of US-based plaintiffs and two similar complaints on behalf of non-US plaintiffs in Norway and South Korea. The three cases are all pending in the United States District Court for the Southern District of New York," said the group in the results announcement.

"The plaintiffs generally allege that the defendants violated the US antitrust laws, state statutes, and the common law by conspiring to manipulate the foreign exchange market by manipulating benchmark foreign exchange rates."

Overall, RBS reported a 93% rise in first-half profit before tax to £2.65bn, from £1.4bn in the first half of 2013.

The FX Market

The daily $5tn (£3.1tn, €3.7tn) currency market is the largest in the financial system and is pegged to the value of funds, derivatives and products.

Morningstar estimates that $3.6tn in funds, including pension and savings accounts, track global indexes.

FX rates are calculated and compiled by using data from a variety of submitted provisions on a number of platforms, such as ThomsonReuters.

It is then calculated by WM, a unit of State Street, to form WM/ThomsonReuters at 1600 GMT daily.