‘Standard Chartered settles forex rigging case after eight years in court’ 15 November 2023

While arguments were heard this week in the Competition Appeal Court from banks accused of rigging the rand exchange rate as far back as 2007. London-based Standard Chartered Bank (SCB) reached a settlement with the Competition Commission on Wednesday, admitting to manipulating the USD/ZAR exchange rate in a case that dates back as far as 2007. SCB has agreed to pay an administrative penalty of R42.7 million for its role in the so-called “rand rigging case” for a variety of offences: fixing bids, offers, bid-offer spreads, the spot exchange rate, and the exchange rate at the FIX (Financial Information eXchange, an information and price sharing system between investment banks and broker-dealers). SCB is one of 28 local and foreign banks accused by the commission of rigging the USD/ZAR exchange rate between 2007 and 2013. The banks are accused of a “single overarching conspiracy” to fix the rand exchange rate through various communication channels, such as Bloomberg and Reuters chat rooms, and allocating markets among traders. The commission says these actions constitute price fixing and market allocation, which violates the Competition Act.

…Meanwhile, the Competition Appeal Court (CAC) heard arguments this week from 13 banks that there was no evidence of a conspiracy, with two banks saying their traders were present in a single chat on one day. “This is not sufficient evidence that he [the trader] had knowledge of a broader conspiracy with the intention to contribute to it,” argued legal counsel for Macquarie. The case has been running for eight years and has been mired in technical arguments, appeals and cross-appeals for much of that time. This may turn out to be the longest-running and most complex case ever filed by the commission, with the merits of the case still not argued. It’s clear the banks have spared no expense in hiring the best legal minds in the country to argue their cases, raising a wall of objections to the commission’s case along the way.

…SCB’s decision to settle with the commission may prompt others to do the same. Several global banks have already admitted guilt, including two former traders with Barclays and Citigroup and former JPMorgan trader Akshay Aiyer, who was sentenced to a brief stint in prison. The commission’s primary evidence is 158 chats involving 28 banks over seven years. This was flimsy evidence of a conspiracy, argued the banks. However, the tribunal ruled in March that a single overarching conspiracy “does not necessarily require that all members of the conspiracy meet at the same time in the same room or for that matter that each member must have met with every other member of that conspiracy. What it does require is contact between firms, either directly or through an intermediary, and a common objective to which the participants consider themselves to be bound.”