JPMorgan Chase (NYSE:JPM) has reached a settlement with accusers who charged in a lawsuit that it had manipulated foreign exchange rates to its advantage, a well-placed source said today. Reported by several news wires, the United States largest bank told sources at AFP that JPMorgan’s deal, which still needs the approval of a judge, clears away the main legal challenge to it in the Forex case.
The bank was one of 12 named in the class-action suit filed in March alleging that its staff conspired to manipulate rates in the multi-trillion dollar forex market in ways that cheated customers while boosting bank earnings.
JPMorgan was not expected to divulge the financial terms of the deal with the plaintiffs, who include large investment funds, urban governments and employee pension plans, said the source, who is close to the matter and spoke on condition of anonymity. But the source said the settlement amount was less than USD 1 billion. Another well-placed source said the settlement was not large enough to have a material impact on the bank’s earnings.
In mid-afternoon trading New York time, JP Morgan (NYSE:JPM) shares were down a little over 3% after digesting the news, trading at $60.45 down $2.04 (-3.26%).
As covered on LeapRate during the past year, a number of the world’s largest banks have come under investigation in the United States, Europe and Asia over foreign exchange market manipulation, and a number of bank employees have been prosecuted in the scandal. Also named in the March lawsuit were Credit Suisse, UBS, BNP Paribas, Barclays, HSBC, Royal Bank of Scotland, Deutsche Bank, Bank of America, Citigroup, Goldman Sachs, and Morgan Stanley.