Credit Suisse Group AG was part of a “conspiracy network” focused on rigging the foreign exchange market, a lawyer said in opening arguments in an antitrust suit against the bank.
Christopher Burke, who is representing a group of plaintiff pension funds and other investors, told jurors on Tuesday that Credit Suisse and 15 other banks participated in online chatrooms in which they colluded on spreads for currency pairs from late 2007 through 2013.
“The chatrooms gave the dealers an edge,” Burke said in federal court in Manhattan, adding, “With the network, the dealers win and the customers lose.”
Credit Suisse is the only one of the banks to go to trial, which kicked off Tuesday following jury selection. The other banks, including Citigroup Inc., UBS Group AG, Barclays Plc, JPMorgan Chase & Co., HSBC Holdings Plc and Deutsche Bank AG, agreed to pay US$2.3 billion ($3.31 billion) to settle claims against them in 2017.
Burke cited several examples of traders at the different banks discussing spreads for currency pairs and said the jurors should ask themselves why the banks weren’t competing against each other. “They know it was wrong. They did it anyway,” he said, noting that five banks, though not Credit Suisse, pleaded guilty to criminal charges over the conduct.
Edward Moss, a lawyer for Credit Suisse, countered in defence opening arguments that the plaintiffs were trying to connect “smaller isolated things” to allege a larger conspiracy that never existed.
“Were those smaller isolated bad things?” Moss asked rhetorically. “Yeah, they were. There were people in this industry who did some things they shouldn’t do. They want to mass them together and say this is one big massive thing. It doesn’t work that way.”
He instead compared the situation to separate groups of carpools on the Long Island Expressway who encourage their drivers to speed up.
“Maybe it happens 70 times a day on the LIE that people are speeding, a carpool here and a carpool here, but does that mean all the drivers on the LIE entered into a single agreement to speed?” Moss told the jury. “There will be no evidence that the government prosecuted anything like this. The government prosecuted one carpool at a time.”
Burke highlighted some of the chat messages traders sent. “The days of customers holding us ransom is over,” one said. Another said, “We should all join together. They need us more than we need them.”
The lawyer said the chatrooms provided a “get out of jail” card to traders who encountered a disadvantageous spread, giving them a chance to agree on a fixed spread across banks.
The case is In Re Foreign Exchange Benchmark Rates Antitrust Litigation, 13-cv-7789, US District Court, Southern District of New York (Manhattan).