Article: Itau (ITUB) and Other Global Banks Sued for Rate Rigging

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Itau (ITUB) and Other Global Banks Sued for Rate Rigging

Zacks Equity Research , 17 June 2021

Major banks might need to pump up their legal reserves, as five of them are on the radar of the Exporters’ association, AEB, and Brazil’s anti-trust watchdog, Administrative Council for Economic Defense (CADE). Reportedly, Brazil’s biggest exporters, such as Vale SA and Suzano SA, are appealing in a lawsuit for 19 billion reais ($3.77 billion) from ItauUnibanco Holding SA ITUB, Banco Santander Brasil SA BSBR, HSBC Holdings plc HSBC, Citigroup C and BNP Paribas BNPQY on grounds of alleged manipulation of the Brazilian Real (R$).

This news was first reported by Valor Economico, a Brazilian newspaper and Reuters had reviewed the court documents.

The Exporters’ association AEB, which had initially filed the lawsuit in 2018 without specifying damages, stated that Brazilian exporters were inflicted with losses worth 107.4 billion reais, from banks’ purported currency manipulation between 2010 and 2011. The AEB’s compensation calculations took into consideration that the association represents 20% of Brazilian exporters.

Per the article, Citigroup remarked that its conduct adheres to all rules. HSBC (whose Brazilian unit was acquired by Banco Bradesco SA (BBD) in 2016) refused to comment on it. Banco Santander stated that it is still oblivious of the class action, while Itau noted that it will litigate the accusations.

As per the AEB’s lawyer, Bruno Maggi, the association has been unable to make calculations for the period between 2008 and 2012, which it believes to be the full period that a cartel manipulated the exchange rates.

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