Credit Suisse Fails to Get FX Manipulation Lawsuit Dismissed

While 15 other banks that faced class lawsuits for alleged FX market manipulation reached a settlement with plaintiffs, Credit Suisse was notable for its hard line in defending the case, refusing to agree to a settlement. That tactic is now to be tested in US courts after a judge refused an attempt by the bank to have the case dismissed.

Judge Lorna Schofield from the Southern District Court of New York, who has sat on several of the other cases involving alleged manipulation, said it was too early to decide, as the bank claimed, that it was not part of a global conspiracy. Equally, Judge Schofield said that it needs to be decided whether there were a number of smaller conspiracies, or one global conspiracy, before further judgement could be made.

The crux of the matter, therefore, may come down to how many chat rooms Credit Suisse traders were actually involved in, and to what extent. Because there has been no trial regarding the banks’ collective activities, it remains unclear whether the US legal system will view each chat room – and there were a large number of them – as an individual conspiracy, or whether they were all part of the same act. Certainly the existence of certain traders or trading desk members in multiple rooms is likely to strengthen the plaintiffs’ case, but it is by no means a certain outcome.

The bank for its part, says it has a strong defence to be presented at trial, so it seems there is no thought of attempting a last-minute settlement.