Financial Firm Settlements: BNY Mellon Settles Yen Libor and European Tibor Rigging Claims for $30M & HSBC Holdings to Pay Investors $35M for FX violations

HSBC Holdings Plc (HSBC) will pay $35M to resolve an anti-trust lawsuit accusing the bank of Euroyen Tibor and yen Libor rigging. The securities case, brought by Sonterra Capital Master Fund, Hayman Capital Management, California State Teachers’ Retirement System, lead plaintiff Jeffrey Laydon, and other institutional investors, accused HSBC and other banks of manipulating benchmark rates over several years.
According to the investor lawsuit, Laydon sustained losses in the thousands of dollars in 2007 when shorting the Euroyen Tokyo Interbank Offered Rate (Euroyen Tibor).

As part of the settlement, HSBC will provide attorney proffers detailing facts that the bank uncovered during its own probes into Euroyen Tibor and Euroyen Libor manipulation, witness statements made by its employees, specific documents that it has given to the Federal Reserve Board of New York and regulators, and other information.

A judge has to approve the deal.

Citigroup (C), which was one of the defendants in the case, reached its own settlement in February when it agreed to pay $23M. RP Martin, another defendant, arrived at a nonmonetary settlement. Other defendants include JPMorgan Chase & Co. (JPM), Barclays PLC (BARC), Mitsubishi UFJ Financial Group Inc., Deutsche Bank AG (DB), and Sumitomo Mitsui Trust Holdings Inc.

In other firm news, Bank of New York Mellon Corp. (BK) will pay $30M to resolve U.S. Securities and Exchange Commission charges accusing the bank of violations involving its foreign exchange business. The regulator claims that from at least ’00 to ’11, the bank overcharged and misled certain clients who belonged to its Standing Instructions program. The program was supposed to process and execute FX trades automatically and without supervision or direct client involvement. Clients were promised the best standards of execution and rates.

Instead, claims the regulator, the bank used the program as a way to make more on each transaction. Trades were purportedly executed at the highest interbank rate available whenever the client purchased foreign currency. Then, when a client sold the currency, the lowest interbank rate would be applied. BNY then would notify clients about the transactions without letting them know how the rate given was assigned.

It was just last year that BNY consented to pay $714M to settle claims accusing the bank of overcharging clients, including pension funds, for foreign exchange services.

Citigroup (C) was also one of the defendants in the case and it reached its own settlement in February by agreeing to pay $23M. RP Martin, another defendant, arrived at a nonmonetary settlement. Other defendants include JPMorgan Chase & Co. (JPM), Barclays PLC (BARC), Mitsubishi UFJ Financial Group Inc., Deutsche Bank AG (DB), and Sumitomo Mitsui Trust Holdings Inc.

In other firm news, Bank of New York Mellon Corp. (BK) will pay $30M to resolve U.S. Securities and Exchange Commission charges accusing the bank of violations involving its foreign exchange business. The regulator claims that from at least ’00 to ’11, the bank overcharged and misled certain clients who belonged to its Standing Instructions program. The program was supposed to process and execute FX trades automatically and without supervision or direct client involvement. Clients were promised the best standards of execution and rates.

Instead, claims the regulator, the bank used the program as a way to make more on each transaction. Trades were purportedly executed at the highest interbank rate available whenever the client purchased foreign currency. Then, if whenever a client sold the currency, the lowest interbank rate was applied. BNY then would notify clients about the transactions without letting them know how the rate given was assigned.

It was just last year that BNY consented to pay $714M to settle claims accusing the bank of overcharging clients, including pension funds, for foreign exchange services.

Contact our securities law firm to request your free case consultation with one of our institutional investor fraud attorneys. The SSEK Partners Group represents high net worth individual investors and institutional investors.

HSBC to pay $35 million to resolve yen Libor litigation in U.S., Reuters, June 17, 2016

BNY Mellon Will Pay $30 Million to SEC to Settle FX Case, Bloomberg, June 13, 2016