South Korea’s Simmtech Sues Large Banks in U.S. Court
Semiconductor Maker Claims Damages in Connection with Alleged Currency Markets Manipulation
By Anjani Trivedi
Nov. 19, 2013 11:19 a.m. ET
A South Korean company is claiming damages in a U.S. court from some of the world’s biggest banks in connection with alleged manipulation of global currency markets.
Simmtech Co. Ltd. 036710.KQ -2.15% , a semiconductor maker, filed a class-action suit Nov. 8 against defendants including Barclays PLC, BCS +0.43% Citigroup Inc., C +0.68% Credit Suisse Group AG, CS -0.45% Deutsche Bank AG, DB -0.15% J.P. Morgan Chase, JPM +0.90% Royal Bank of Scotland Group PLC, RBS -0.85% and UBS AG. UBS -0.70%. The banks all declined to comment on the allegations. The lawsuit comes amid a global probe into possible currency market manipulation involving regulators from Hong Kong, the U.S., Europe and the U.K. At least a dozen traders at five banks have been suspended from work in connection with the ongoing investigation. The investigations are focused in part on electronic chat rooms with names such as “The Bandits’ Club” and “The Cartel,” according to people familiar with the probe. Simmtech’s lawsuit, filed in the New York district court, alleges that the banks conspired to manipulate the London “fix,” a global benchmark for where currencies are trading. The London fix is the price computed at 4 p.m. London time by WM/Reuters, a joint venture between State Street’s WM unit and Thomson Reuters. That fix serves as a reference point, and many investors will ask their banks to process transactions at the fix price. The lawsuit alleges “collusion” by traders at different banks concentrated orders to move markets in their favor without their clients knowing and violated sections of U.S. antitrust law. Several South Korean companies across industries have inquired about joining Simmtech’s class-action suit, B.J.Kim, a lawyer representing Simmtech, told The Wall Street Journal. Simmtech’s action comes a few days after Haverhill Retirement System, a Massachusetts-based pension fund that provides retirement and disability benefits, filed a similar class-action suit in a New York district court against the same group of banks.
Write to Anjani Trivedi at anjani.trivedi @wsj.com
