(Reuters) - Barclays, JP Morgan, RBS, UBS and Citigroup are being sued by investors over allegations they rigged the global foreign exchange market, in a test of US-style class actions in Britain.
The claim, estimated to be worth more than £1bn (US$1.2bn), was filed at the Competition Appeal Tribunal on Monday, US law firm Scott + Scott said.
JP Morgan, RBS, UBS, Barclays and Citi declined to comment.
Some of the world’s biggest investment banks have already paid more than a combined US$11bn in fines to settle US, British and European regulatory allegations that traders rigged the currency markets.
Litigators have long hoped to replicate in Britain the success of US class action claims against banks, including Goldman Sachs, HSBC and Barclays, that have resulted in US$2.3bn in settlements for big investors.
In May the European Union fined five banks a combined €1.07bn (US$1.2bn) for forex rigging through cartels of traders known as “Essex Express” and “Three Way Banana Split”.
The lawsuit is being led by Michael O’Higgins, the former chairman of British watchdog the Pensions Regulator, and is being funded by litigation finance group Therium.
O’Higgins told Reuters the total value of the claim would depend on the number of forex trades executed in London for UK-domiciled units - which will be automatically included in the action - and the proportional impact of rate rigging on these.
Given the size of London’s FX market, O’Higgins said the total value would likely exceed £1bn.
“Even on a relatively conservative assumption it’s certainly £1bns and possibly several,” O’Higgins said. “Markets should be fair as well as free and in this case the markets weren’t fair.”
The “massive” action is a “perfect” case to be brought as a so-called opt-out collective class action for breaches of UK or European Union competition law, David Scott from Scott + Scott said.