Expat investors welcome laws against illegal fixing of currency rates

Published:  6 Aug at 6 PM
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Investors both in the UK and overseas are waiting for a court date for their legal challenge.

Foreign exchange traders are facing a legal challenge for compensation after the discovery that secret rate-fixing on a major scale has been taking place in online chat rooms. European Union investigators have uncovered the use of online chat forums by employees of major banks in order to secretly manipulate and fix currency exchange rates to the detriment of users.

The EU has issued fines totalling £1 billion to international banks including the Royal Bank of Scotland, Citigroup and JP Morgan Chase, with up to 12 major banks though to have been involved. To date, fines of around £10 billion and compensation totalling around £2 billion have already been paid, with future compensation claims set to involve Barclays and UBS in addition to the three banks already fined.

Legal action to date is testing new British laws which allow class actions, with UK individual investors automatically involved unless they opt out and expat investors required to sign up in order to be legally included. Those who stay with it will receive a proportion of any compensation awarded. The new legislation is aimed against those involved in anti-competitive conduct, and is expected to prove to be far more relevant in consumer compensation claims than the previous laws.

To this effect, lawyers for the claimants state civil recovery for all who’ve been affected, including both individuals and businesses. Expat businesses and those who use various currencies in the course of their businesses should welcome this new approach to stop illegal activities by foreign exchange traders and others who take advantage of their knowledge and positions.
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