In re Foreign Exchange Benchmark Rates Antitrust Litigation

Background

The plaintiffs are over-the-counter purchasers of foreign-exchange spot, forward, and/or swap trades who transacted directly with the defendant banks. They allege that banks conspired to fix bid-ask spreads for 52 currency pairs during the class period, December 1, 2007, through December 31, 2013. A bid-ask spread is the difference between the prices at which a dealer is willing to buy and sell a currency pair.

The action originally named 16 defendant banks. Fifteen settled for more than $2.31 billion. Credit Suisse Group AG, Credit Suisse AG, and Credit Suisse Securities (USA) LLC were the remaining defendants, referred to together as the CS Defendants or Credit Suisse. Earlier, the court certified a class under Federal Rule of Civil Procedure 23(c)(4) on two issues only: whether a conspiracy existed to widen spreads in the foreign-exchange spot market and whether Credit Suisse participated in it.

Motions and legal standard

The CS Defendants moved for summary judgment, which is a ruling without a trial when no genuine dispute over an important fact exists and the moving party is entitled to judgment under the law. They argued that no single conspiracy to widen spreads existed or that they did not participate in one. The plaintiffs cross-moved for summary judgment, arguing that a conspiracy existed and that Credit Suisse participated.

The court applied Section 1 of the Sherman Act. For an alleged price-fixing conspiracy, the plaintiffs had to present direct or circumstantial evidence tending to exclude the possibility that the banks acted independently. The court explained that a jury could find either one overarching conspiracy or multiple separate conspiracies, depending on the evidence and the inferences drawn from it.

Evidence concerning a conspiracy

On the CS Defendants’ motion, the court concluded that a reasonable jury could find that one conspiracy existed. On the plaintiffs’ motion, however, the court concluded that a reasonable jury could instead find that there was no single overarching conspiracy and that only multiple smaller conspiracies existed.

The court found that the alleged agreement was economically plausible because wider spreads could increase dealers’ profitability. The record included chat messages in which traders from competing banks discussed spreads, encouraged wider spreads, referred to a “pact” or “cartel,” and sometimes sought to keep competitors from quoting narrower spreads. The plaintiffs also presented evidence of more than 400 communications concerning spreads and evidence that Credit Suisse was connected to the other defendant banks through overlapping chat rooms.

The court treated overlapping participants, cooperation toward a common goal, and mutual exchange of pricing information as evidence that could support a single collective venture. It also considered evidence that some former Credit Suisse employees invoked the constitutional privilege against self-incrimination in response to questions about possible coordination. The court rejected the argument that the absence of one document or statement acknowledging a worldwide conspiracy required judgment for Credit Suisse; an antitrust agreement can be express or tacit, and a participant need not know every detail or every participant’s identity.

The court nevertheless identified factual disputes about the scope of the alleged conspiracy, the connections among different chat rooms, and whether the evidence showed one conspiracy or several. Those disputes required a factfinder to weigh the evidence rather than the court to resolve the issue on summary judgment.

Credit Suisse’s participation

The court also denied summary judgment on Credit Suisse’s participation. It reasoned that the question whether Credit Suisse joined a particular conspiracy could not be resolved until the scope of that conspiracy—one conspiracy or multiple conspiracies—was determined. The court noted that there was uncontroverted evidence that Credit Suisse participated in at least some conspiratorial conduct in the foreign-exchange market, while also stating that the parties were not entitled to judgment on the disputed class issue.

Disposition

The court denied the CS Defendants’ motion for summary judgment and denied the plaintiffs’ motion for summary judgment. The order closed those motions, docket numbers 1574 and 1580. It did not finally determine whether a single conspiracy existed or whether Credit Suisse was liable; those disputed issues remained for resolution by a jury.