Reasonable people can disagree over whether the yearslong conspiracy of currency traders meeting online in embarrassinglynamed, anticompetitivechat groups to rig foreign exchange benchmarks in ways that would profit them at their clients' expense was bad or merely illegal. What is not in dispute is how much honking cash banks have agreed to disgorge to get over that whole unpleasantness and move onto better things.
Now, BlackRock and PIMCO have apparently done the math and decided that getting a hunk of that juicy forex lucre is worth the trouble of hiring some lawyers and cheesing off their occasional counterparties:
BlackRock Inc., Pacific Investment Management Co. and hedge fund BlueCrest Capital Management are working with law firm Quinn Emanuel to recover losses they blame on the manipulation of currency benchmarks, according to two people familiar with the case, who asked not to be identified because nothing has been filed.
The fund giants' move marks an odd new chapter in the ongoing progression of legal actions against the banks over their rate-rigging sins of yesteryear. First it was the regulators, who managed to extract upwards of $10 billion in settlements on both sides of the Atlantic. Then the class actions got going, leading to a few billion more in settlements from the likes of HSBC and Goldman Sachs for the benefit hardworking retirement investors whose currency-related investments evidently fell victim to the dastardly Cartel. These were little fish. Now come the big ones:
The target banks, including Barclays Plc, Citigroup Inc., HSBC Holdings Plc, JPMorgan Chase & Co., Royal Bank of Scotland Group Plc and UBS Group AG, have been fined billions of dollars for conspiring to rig FX benchmarks. The firm, which will probably file lawsuits in London and New York, is trying to attract additional investors, the people said.
None of the names are surprising, thought it's hard not to feel a little bad for little old RBS, whose highly principled tattling got the whole forex ball rolling in the first place. First they finked, now they're getting Finked.
The one big wrinkle in all of this is the possibility that by barging into the line of investors waiting patiently for their forex payouts, BlackRock et al will disrupt the ongoing class actions. Evidently there's already some bad blood on this front:
In an April 24 letter e-mailed to U.S. District Judge Lorna Schofield, lawyers complained that "certain unnamed law firms were sending false and misleading communications to class members to persuade them to opt out of the settlements," the judge said in a court order Thursday.
At least Jamie Dimon and Larry Fink will have something interesting to talk about at the next meeting of President Trump's business council.