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12 Largest Banks Sued By Public Retirement Funds For "Conspiring To Rig Global FX Markets"

Tyler Durden's picture




 

Yesterday, we read with some amusement that Goldman has moved Guy Saidenberg, reportedly one of the greater profit centers at the firm - and how could he not be when he always traded against Tom Stolper's recommendations which led to tens of thousands of pips in losses to those who listened to him over the past five years - from head of global foreign-exchange trading to a new role, as co-head of commodities.  Why did Goldman decide to scrap its once uber-profitable FX vertical and redo it from scratch? Simple - the ability to rig and manipulate FX markets, which are now under every global regulator's microscope after the "Cartel" members so foolishly let themselves be exposed to the entire world, is no longer there, as confirmed last night by news that a dozen large investors have filed a joint lawsuit against 12 banks for "allegedly conspiring to rig global foreign-exchange prices." Allegedly? Hasn't everyone read the Cartel chatroom transcripts yet?

WSJ reports:

The class-action lawsuit, filed in U.S. District Court in the Southern District of New York late Monday, was from a group of investors across the U.S. and Caribbean, including city and state pension plans.

 

They accused the banks of communicating "with one another, including in chat rooms, via instant messages, and by emails, to carry out their conspiracy," and for rigging foreign-exchange rates as far back as January 2003, the lawsuit said.

The bank sued are BofA, Barclays, BNP, Citi, Credit Suisse, Deutsche, Goldman, HSBC, JPM, Morgan Stanley, RBS and UBS, or, in other words, everyone. And certainly all the Too Big To Prosecute banks. So best of luck there, even though the plaintiffs include some very recognizable public investment funds:

The investors behind the consolidated lawsuit are: Aureus Currency Fund LP, a Santa Rosa, Calif., investment fund; the City of Philadelphia and its board of pensions and retirement; the Employees' Retirement System for the Government of the Virgin Islands; the Employees' Retirement System of Puerto Rico Electric Power Authority; Fresno County Employees' Retirement Association; Haverhill Retirement System for the city of Haverhill, Mass.; Oklahoma Firefighters Pension and Retirement System; State-Boston Retirement System; Tiberius OC Fund, a Cayman Islands fund; Value Recovery Fund LLC, a Delaware fund with offices in Connecticut; Syena Global Emerging Markets Fund LP, a hedge fund in Connecticut; and the United Food and Commercial Workers Union.

 

In the complaint, the investors accused the banks of controlling foreign-exchange rates via a "small and close-knit group of traders." They alleged it became possible for banks to rig the market because the traders "have strong ties formed by working with one another in prior trading positions" and by in many cases living "in the same neighborhoods in the Essex countryside just northeast of London's financial district."

 

"They belong to the same social clubs, golf together, dine together and sit on many of the same charity boards," the complaint adds.

Of course, the rigging of FX markets, disclosed hot on the heels that Libor too was massively manipulated (to the delight of "conspiracy theorists" everywhere) is by now well known.

But the punchline is not that FX is rigged, and as a result virtually all carbon-based traders are now gone, leaving the FX market at the mercy of Virtu and GETCO algos (those USDJPY momentum ignitions at specific, recurring times of the day are just that), but that as Goldman has shown by relocating Saidenberg, the commodity market is the only one where manipulation, rigging and fraud are not only possible but smiled upon by regulators. Because one of the key commodities in said market is gold. And as everyone knows, alongside getting the Russell 200,000 to all time highs, the other core mandate of central bankers everywhere is to push gold to 0.

The worst news: we are rapidly running out of "conspiracy theories" that haven't become conspiracy facts yet.

 

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Tue, 04/01/2014 - 10:51 | 4613709 kliguy38
kliguy38's picture

HA.....bet this gets settled and buried in a hurry

Tue, 04/01/2014 - 10:57 | 4613727 SheepDog-One
SheepDog-One's picture

Nah....these clowns can just drag it out for however many years they feel like just like they'll do with the 'HFT investigation'....drag it out then just say we didn't find anything wrong.

Tue, 04/01/2014 - 11:01 | 4613746 MillionDollarBonus_
MillionDollarBonus_'s picture

Hopefully this will cover a portion of the shortfall in government pensions. It's an absolute disgrace that public workers should be denied their hard-earned pensions after a life of contributions to this country. Everybody is going to need to chip in to make sure that public retireees get the pensions that they were promised. Our politicians have let them down, and it is our duty to repay them for their service to this country.

Tue, 04/01/2014 - 11:04 | 4613757 cifo
cifo's picture

I am still waiting for the April 1st post about Corzine under arrest.

Tue, 04/01/2014 - 11:15 | 4613790 NotApplicable
NotApplicable's picture

Whar RICO? Whar?

Tue, 04/01/2014 - 11:24 | 4613815 Troll Magnet
Troll Magnet's picture

Arresting criminals would be nice but may I haz moar suicideds in the banking sector? Many, many moar?

Tue, 04/01/2014 - 11:29 | 4613826 Bearwagon
Bearwagon's picture

Don't get fooled: All those suicideds are NOT a good sign ...

Wed, 04/02/2014 - 12:25 | 4617620 papaclop
papaclop's picture

I couldn't believe the congressional hearings where his nameplate read "the Honorable" when it should have used his real title :
John "the slime" Corzine.
Congress : what a bunch of useless patsies.

Wed, 04/02/2014 - 12:25 | 4617621 papaclop
papaclop's picture

I couldn't believe the congressional hearings where his nameplate read "the Honorable" when it should have used his real title :
John "the slime" Corzine.
Congress : what a bunch of useless patsies.

Tue, 04/01/2014 - 11:04 | 4613759 Haus-Targaryen
Haus-Targaryen's picture

I don't care about promises that were made before I was born, that I am expected to pay on my entire life.  There are enough people like me, to leave people like you, who will be holding the bag ... completely screwed.

Tue, 04/01/2014 - 11:15 | 4613788 greatbeard
greatbeard's picture

>> I don't care about promises that were made before I was born,

You mean like the Constitution?

Tue, 04/01/2014 - 11:25 | 4613818 Haus-Targaryen
Haus-Targaryen's picture

No, I mean like short term liabilities being financed with 30 year tbills.

Tue, 04/01/2014 - 11:04 | 4613760 SWCroaker
SWCroaker's picture

Mom told me when I was a kid that when I "made faces" to be careful because one day it "just might stick".

I worry for your well-being, mdb.

Tue, 04/01/2014 - 13:58 | 4614322 AbbeBrel
AbbeBrel's picture

- La nature vous offre le visage que vous avez à vingt ans, mais c'est à vous de mériter le visage que vous aurez à cinquante ans - Coco Chanel

 

(translation thanks to Google):

 

- Nature gives you the face you have at twenty, but it's up to you to merit the face you have at fifty

Tue, 04/01/2014 - 11:05 | 4613762 LawsofPhysics
LawsofPhysics's picture

"Our politicians have let them down" yes, then let all the politicians (past and present) PAY for THEIR actions with their own PRIVATE wealth.

Good call MDB.  Make it happen!

Tue, 04/01/2014 - 11:18 | 4613797 Al Huxley
Al Huxley's picture

Geez MDB, why would you penalize the TBTF banks to cover pension shortfalls, after all they've done for the country.  Why not impose some sort of 'Patriot Tax' to fund it?

Tue, 04/01/2014 - 10:55 | 4613729 Sudden Debt
Sudden Debt's picture

NO WAY!!!

100 DOLLAR FINES FOR EVERYBODY!!!!

THAT'LL TEACH THEM!!!

Tue, 04/01/2014 - 11:00 | 4613743 overmedicatedun...
overmedicatedundersexed's picture

well yellen said, the economy needs stimulus for a long time, tbtf will be bailed out of any legal award, it's only fair - Fed's owners will pay themselves as they did in 08..good club to be in- after all none of these tbtf are real they are the walking dead, which no one can kill.

Tue, 04/01/2014 - 10:59 | 4613738 Buckaroo Banzai
Buckaroo Banzai's picture

"Buried", huh. Reminds me of those 13 bankers who died under mysterious circumstances recently. Say, weren't they in the FX business as well?

Tue, 04/01/2014 - 11:06 | 4613765 toady
toady's picture

Yeah, now is the time to sue. All the potential witnesses are buried, all the top players have distanced themselves, and, most importantly, all the loopholes are in place.

It's all perfectly legal.

Tue, 04/01/2014 - 11:01 | 4613745 RevRex
RevRex's picture

Obama has the Just Us Department working on this right now!

Tue, 04/01/2014 - 11:05 | 4613761 Buckaroo Banzai
Buckaroo Banzai's picture

If by "working" you mean "not working", then yes.

Tue, 04/01/2014 - 10:51 | 4613711 FieldingMellish
FieldingMellish's picture

"The market is not rigged." -CNBC

Tue, 04/01/2014 - 10:57 | 4613733 Sudden Debt
Sudden Debt's picture

They only take 1 penny on every stock....

BUT WHAT IF THERE'S 100 HFT FIRMS TAKING A PENNY ON EVERY STOCK???

AND WHAT IF YOU BUY 1000 STOCKS???

I bet nobody would let somebody  steal 1000 dollars from them without punching them on the nose.

They keep talking about that 1 PENNY.

But they forget how many bastard there are who are doing this!!

Tue, 04/01/2014 - 10:52 | 4613712 Haus-Targaryen
Haus-Targaryen's picture

Wake me up with Bernanke and Yellen are getting prodded with a branding iron for Ag and Au manipulation.

Tue, 04/01/2014 - 10:53 | 4613715 blabam
blabam's picture

Bullish. 

Tue, 04/01/2014 - 10:53 | 4613716 pods
pods's picture

Time to dole out another few scraps.

Costs of doing bidness.

pods

Tue, 04/01/2014 - 10:54 | 4613717 LawsofPhysics
LawsofPhysics's picture

Once the "insiders" start eating each other, then things might get interesting.  my guess is that these "banks" will simply pay a small fine...

 

Tue, 04/01/2014 - 11:00 | 4613742 CrazyCooter
CrazyCooter's picture

That is the angle I have been chewing on lately, not that it changes much. When you have "suckers" in the market, insiders can make money on the way up and on the way down. Without bagholders, it is a one way, and much less profitable, trip.

As the bag holders are increasingly more sophisticated (i.e. the sharks attacking the sharks) the dynamics change a lot. I think this is newsworthy trend for two reasons; (1) it sets precendent for market participants and (2) if the plaintiffs aren't happy they may find another market to play in.

It will definately be interesting to watch how this unfolds over time.

Regards,

Cooter

Tue, 04/01/2014 - 11:19 | 4613802 NotApplicable
NotApplicable's picture

Question is, which bank have they set up as a fall-guy?

Tue, 04/01/2014 - 14:00 | 4614330 medium giraffe
medium giraffe's picture

Whichever banks have taxpayer bail-out obligations.  RBS I'm looking at you...

Tue, 04/01/2014 - 10:53 | 4613722 Sudden Debt
Sudden Debt's picture

Oh! That wasn't legal?

didn't know that...

the mailboy did it... for sure... saw him do it...

Tue, 04/01/2014 - 11:23 | 4613813 HRamos_3
HRamos_3's picture

It was that french dude... How is he called... Jerôme K something.. Jerôme Kerviel, that's it.

Tue, 04/01/2014 - 10:54 | 4613725 Aknownymouse
Aknownymouse's picture

"This is wildely bullish news. Buy the dip. ". CNBC analysts

Tue, 04/01/2014 - 10:57 | 4613732 ebworthen
ebworthen's picture

Won't change until they are hung instead of sued.

Tue, 04/01/2014 - 11:00 | 4613735 Kaiser Sousa
Kaiser Sousa's picture

what was Einsteins definition of insanity again???

look u dumb ass mother fuckers,

the MoneyChangers run this shit - by that i mean they own every branch of the fucking government..

their markets r intended to financially rape u on a continual basis so why would any worker allow his pension managers to have their hard earned debt coupon dollars/derivitives invested in the fucking Fraud Markets?????

if all these debt slaves liquidated their soon to be "gone" retirement plans withdrew from the debt paradigm by investing in Physcial Gold and Silver held outside of the system this shit would end ASAP...

u choose to stay ignorant - ur fault..

u choose to continue to be financially fucked in the ass - ur fault...

DEATH TO THE MONEYCHANGERS

Tue, 04/01/2014 - 10:59 | 4613740 101 years and c...
101 years and counting's picture

who needs to rig FX markets when you write the scripts for the Fed, ECB, BOJ, & BOE?  come on, USD getting a little too strong?  give Janet a bucket of gravy for lunch and she'll talk about printing until she's blue in the face.....

Tue, 04/01/2014 - 11:01 | 4613749 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Doing god's work all of them....

 

The worst news: we are rapidly running out of "conspiracy theories" that haven't become conspiracy facts yet.

We got Icke's lizard people still and that Malaysian airliner to distract everyone with on History Channel for the next year or so of nonstop programming. Fried chicken and death metal this shit is so good it could have only been created by ancient alien technology shit is getting stale.

Tue, 04/01/2014 - 12:11 | 4613950 WarPony
WarPony's picture

The lizard people are fact, met one in the army in '82.

Tue, 04/01/2014 - 11:05 | 4613755 buzzsaw99
buzzsaw99's picture

they know it's rigged and yet they still play the game

sell a few trillion dollars of shit securities and buy physical gold or else they deserve to get screwed

Tue, 04/01/2014 - 11:05 | 4613763 Bill of Rights
Bill of Rights's picture

Long Astro Glide and Cigarettes.

Tue, 04/01/2014 - 11:07 | 4613766 disabledvet
disabledvet's picture

markets still all come down to liquidity.

the simplest way is to keep nuking the dollar and then "sue the losers" for not keeping up (keep inflation in check.)

pricing still remains a problem...inventories are flat lining again. it's the inability to pass on price increases that remains the Cartel's biggest fear. How to roll over all that debt if interest rates remain this low?

Tue, 04/01/2014 - 11:08 | 4613770 Seasmoke
Seasmoke's picture

I want to put 2 pennies on Jamie Dimons eyes. 

Tue, 04/01/2014 - 11:32 | 4613831 Bearwagon
Bearwagon's picture

No, you don't! I cannot believe that you want him to enter the realms of the honest and decent dead. He shall stay outside, and therefore: No pennies for him!

Tue, 04/01/2014 - 11:10 | 4613773 GrinandBearit
GrinandBearit's picture

BULLISH !

Tue, 04/01/2014 - 11:14 | 4613784 Calculus99
Calculus99's picture

Only taking a penny a share is similar to the only taking 0.0001 penny per can of coke/beer/beans via rigging the ally market etc. Yes it's small, but oh so very profitable.

And those right there are the best scams because virtually nobody realises what's happening as the numbers are so msall to the individual.

Tue, 04/01/2014 - 11:17 | 4613791 Al Huxley
Al Huxley's picture

Surely this must be the April Fools Day post.

Tue, 04/01/2014 - 11:51 | 4613896 FieldingMellish
FieldingMellish's picture

Everyday is April Fools in the markets.

Tue, 04/01/2014 - 14:38 | 4614484 SAT 800
SAT 800's picture

It's kind of hard to tell. It's amazing there's anyone, outside of the public, naive enough to be surprised that Major Banks manipulate the FX market; of course they do. In many cases, that's their major employment. In all cases it's a large part of the trading department. You suss out opportunities in the FX market by thinking backwards from the evidence of the latest manipulations; to pick up which way they're going next. I thought everyone knew this.

Tue, 04/01/2014 - 11:18 | 4613798 Spungo
Spungo's picture

Get 20 billion from government. Pay 10 billion in fines. Pocket the difference.

Tue, 04/01/2014 - 11:22 | 4613809 PlusTic
PlusTic's picture

A loud boom, and the lingering smell of cordite would be a just reward for these parasites...

Tue, 04/01/2014 - 11:27 | 4613822 q99x2
q99x2's picture

Please, please God can we have some bankers jumping on this one.

Tue, 04/01/2014 - 11:37 | 4613848 vincent
vincent's picture

Gary Kaminsky of CNBC....

"High frequency trading is irrelevant" and multi millionaires deserve to beat you cause they have a better mousetrap.

 

There is no chance that any of this will end well.

Prepare accordingly. GLTA

Tue, 04/01/2014 - 11:59 | 4613923 madcows
madcows's picture

why isn't there a class action for every american...

Tue, 04/01/2014 - 12:09 | 4613947 overmedicatedun...
overmedicatedundersexed's picture

"why isn't there a class action for every american..." you don't have standing to bring any case only those with standing can bring them, and the new definition is : not in the club you don't get standing in our courts, and the club never let's people like us in.

Tue, 04/01/2014 - 12:14 | 4613956 NoTTD
NoTTD's picture

Look for the Colstanza defense:

 

https://www.youtube.com/watch?v=-RvNS7JfcMM

Tue, 04/01/2014 - 12:22 | 4613975 Itch
Itch's picture

Tyler it wasn't so much that the regulators weren't fine with FX manipulation, its that the manipulation became so fragmented in chatrooms, but more importantly it was becoming public knowledge. Different networks of unwashed traders were springing up and pissing off the networks that actually matter. Who in their right mind is going to believe that regulators did not know that the FX market was one big 24hr fuckfest? Here's a way to make a few quid; go and put on a 10m lot with a small broker and set a limit and stop in an illiquid cross, then place a 5m lot with Barclays or DB with the opposite limit and stop. See how long it takes for the smaller broker to tell you to go fuck yourself.  suppose you would have trouble finding a broker that doesn't have the exact same counterparties as all the others though. 

Brokers love to boast of their big shiny important counterparties, they are nearly all the same though in each case, and the poor customer probably thinks he's in safe hands. I used to have a broker that said in correspondence "it's been a pleasure servicing you", i always knew they were taking the piss. 

Tue, 04/01/2014 - 12:33 | 4614023 StupidEarthlings
StupidEarthlings's picture

Too Rigged to fail?

Tue, 04/01/2014 - 12:50 | 4614077 22winmag
22winmag's picture

Good luck and keep dreaming!

Tue, 04/01/2014 - 13:12 | 4614147 Chuck Knoblauch
Chuck Knoblauch's picture

The supposed suicides are making more sense now.

Tue, 04/01/2014 - 13:24 | 4614184 Conax
Conax's picture

"as Goldman has shown by relocating Saidenberg, the commodity market is the only one where manipulation, rigging and fraud are not only possible but smiled upon by regulators."

The truthiness of this makes me kind of sick.

 

Tue, 04/01/2014 - 16:55 | 4615057 Wait What
Wait What's picture

"we are rapidly running out of "conspiracy theories" that haven't become conspiracy facts yet"

if you are fortunate, one of the perks of being considered 'nuts' and 'wrong' for a long time is being around when proven right.

there are no coincidences, only conspiracies.

some of the gems I've taken from ZH.

you can yell CONSPIRACY! at the top of your lungs, but with time the sleeper effect takes over and they lump you into the mass of ppl who just found out and are indignant about what's been going on. it's the curse of knowledge in a world full of consensus seekers.

Do NOT follow this link or you will be banned from the site!