Citibank Faces New Forex Rigging Suit From Currency Trader
Joanne Faulkner, 29 March 2021
Citibank has become the latest bank to be sued by a British currency investment firm over allegations that its traders manipulated foreign exchange markets for profit, in the expanding litigation accusing the company of trade front-running.
ECU Group PLC alleges in an amended March 10 High Court claim, which was recently made public, that traders at Citibank NA misused its confidential information to make secret profits. They allegedly traded ahead of forex transactions by ECU clients, an illegal tactic known as front-running.
ECU, which helps companies manage debt in multiple currencies, is seeking unspecified damages for losses it says correspond to the wrongful profits Citibank made from so-called stop-loss orders when providing forex services between 2007 and 2010. The orders directed the bank to trade with the investment firm when the currency hit a fixed price.
Citibank was one of five banks fined £1.1 billion ($1.5 billion) by the Financial Conduct Authority in 2014 to settle allegations of foreign exchange rigging.
ECU said in its claim that it “now reasonably infers that the bank’s systematic misconduct included market price manipulation and misuse of confidential information and trade secrets in respect of ECU stop-loss and limit orders, given the nature, size, frequency and duration of trading conducted by the bank” on behalf of the company.
