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DOJ Requests Delay in FX Antitrust Litigation Case

The US Department of Justice (DOJ) has requested that a New York Federal Court halt discovery in an antitrust class action accusing major banks of manipulating the FX market, due to an ongoing grand jury investigation.

The DOJ's Antitrust Division and the Fraud Section of its Criminal Division sought what it described as a "limited stay" of discovery in the case against 12 banks, according to a 13 February letter to the court released last week.

After six months the agency said it would plan to decide whether it needed a longer stay.

Additional details on the scope of the proposed stay were not available. The DOJ filed its supporting materials under seal, citing an "ongoing, confidential grand jury investigation".

So far authorities in the UK, Switzerland and the Commodity Futures Trading Commission (CFTC) in the US have fined a number of banks a total of roughly $4.3 billion for alleged activities relating to their FX businesses.

The DOJ has yet to bring forward any fines or criminal charges regarding these activities.

Of the 12 banks named in the lawsuit, only JP Morgan has settled with the plaintiffs, agreeing a $99.5 million settlement deal in January (Squawkbox, 1 February).

The banks attempted to have the lawsuit dismissed last month but US District Judge Lorna Schofield of the Manhattan Federal District Court decided rejected their arguments in favour of dismissal (Squawkbox, 29 January).

galen@profit-loss.com Twitter: @Galen_Stops

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