Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Forex benchmark rate manipulation suit transferred to New York, (Nov 23, 2015)

By Linda O’Brien, J.D., LL.M.

The federal district court in San Francisco has granted a request to transfer to the federal district court in New York City a putative class action suit filed by investors, charging domestic and foreign global financial institutions and their subsidiaries with colluding to manipulate and rig the global benchmarks for foreign exchange futures contracts and options on the exchanges in the United States (Nypl v. JPMorgan Chase & Co., November 19, 2015, Chhabria, V.).

Banking institutions Bank of America Corporation, Barclays Bank Plc, Citigroup, Inc., HSBC Holdings plc, JPMorgan Chase & Co., The Royal Bank of Scotland Group plc (RBS), and UBS AG and their subsidiaries deal in foreign currency and participate in the global trading of foreign exchange (forex) future contracts and options on futures contracts on the various exchanges in the U.S.

John Nypl, an investor, filed suit in May along with other plaintiffs, alleging violations of the Sherman Act, the California Cartwright Act, and the California Unfair Competition Law. According to the complaint, the defendant banks conspired to manipulate forex spot prices and benchmark rates to benefit their trading activities, primarily in connection with the setting of the London Fix. The bank defendants moved to transfer venue of the suit to the Southern District of New York where similar consolidated litigation was ongoing.

The court found that transfer to the Southern District of New York was appropriate and more convenient for the defendant banks that are already litigating similar claims in the consolidated action, In re Foreign Exchange Benchmark Rates Antitrust Litigation, No. 13-cv-7789. In determining whether to exercise discretion to transfer a case to another appropriate forum, the court considered the following factors: (1) plaintiffs’ choice of forum; (2) access to evidence; (3) familiarity of each forum with the applicable law; (4) convenience of the parties and witnesses; (5) local interest in the controversy; and (6) relative court congestion and time of trial in each forum.

On balance, the factors weighed strongly in favor of transfer to the Southern District of New York, according to the court. No named plaintiff resided in the Northern District of California. There was no significant connection between California and the facts alleged in the complaint. Further, the judge in the Southern District of New York was far more familiar with the applicable law having adjudicated many similar cases on a consolidated basis, the court concluded.

The case is No. 3:15-cv-02290-VC.

Attorneys: Lingel Hart Winters (Law Offices of Lingel H. Winters) for John Nypl. Stephen D. Hibbard (Shearman & Sterling LLP) for Bank of America, NA. James Matthew Goodin (Locke Lord Bissell & Liddell LLP) for HSBC Finance Corp. Melissa C. King (Davis Polk Wardwell LLP) for Royal Bank of Scotland. Boris Bershteyn (Skadden, Arps, Slate, Meagher and Flom LLP) for JPMorgan Chase & Co.

Companies: Bank of America, NA; HSBC Finance Corp.; Royal Bank of Scotland; JPMorgan Chase & Co.

Cases: Antitrust StateUnfairTradePractices CaliforniaNews NewYorkNews