In re Foreign Exchange Benchmark Rates Antitrust Litigation

Background

The case concerns an alleged conspiracy among banks to fix prices in the foreign-exchange market. After a seven-day trial, the jury returned a special verdict finding that the plaintiffs had not proved, by a preponderance of the evidence, that Credit Suisse Group AG, Credit Suisse AG, and Credit Suisse Securities (USA) LLC knowingly participated in a conspiracy to widen, fix, stabilize, or maintain bid-ask spreads in the foreign-exchange spot market. Judgment was entered for the three Credit Suisse entities.

The plaintiffs moved for a new trial under Federal Rule of Civil Procedure 59(a), arguing that the verdict was against the weight of the evidence and that Credit Suisse’s trial misconduct prejudiced them. The court had previously certified an issue class concerning the existence of a spread-widening conspiracy and Credit Suisse’s participation. It had also denied both sides’ summary-judgment motions before trial.

Weight of the Evidence

The plaintiffs relied primarily on thousands of chat transcripts and witness testimony. They argued that discussions among traders about the “right” or “correct” spread could only reasonably be understood as agreements to fix prices. Credit Suisse offered competing evidence that the discussions concerned market liquidity, volatility, and risk, and that traders used the information to make independent pricing decisions. The jury did not hear that traders necessarily quoted customers the spreads discussed in the chats.

The court held that the evidence supported more than one reasonable interpretation. It was not seriously erroneous or a miscarriage of justice for the jury to accept Credit Suisse’s interpretation of the chats and to credit testimony from Credit Suisse witnesses and other traders who denied participating in a conspiracy. Evidence that some conspiracy existed in the foreign-exchange market did not establish that Credit Suisse participated in it. The court also rejected arguments based on witnesses’ invocations of the constitutional privilege against self-incrimination, noting that the jury had been permitted, but not required, to draw adverse inferences from those invocations.

The court explained that its earlier summary-judgment ruling did not require a different result. That ruling had found disputed issues about whether there was one broad conspiracy or multiple smaller conspiracies. At trial, the parties presented additional evidence and disputed matters that had been uncontroverted at the summary-judgment stage. The modified verdict form allowed the jury to consider smaller conspiracies as well as the alleged global conspiracy.

Alleged Trial Misconduct

The plaintiffs identified several alleged forms of misconduct by Credit Suisse’s counsel. The court found that most of the objections were not preserved because the plaintiffs did not object during trial. Even where conduct arguably occurred, the court found it was not sufficiently prejudicial to justify a new trial.

The court rejected the argument that Credit Suisse misled the jury by emphasizing that it had not been criminally prosecuted or pleaded guilty. In context, the statements referred to criminal proceedings, while the regulatory matters involving Credit Suisse had ended in civil settlements. The court also held that evidence concerning the New York Department of Financial Services order and certain employee-related actions had properly been excluded under the applicable evidence rules.

The court found no basis for a new trial in Credit Suisse’s questioning about Dr. Hal Singer’s regression analysis. Some questioning arguably went beyond the scope of direct examination, and counsel continued one line of questioning after an objection was sustained, but the court found no unfair prejudice. The court also rejected the claim that Credit Suisse improperly suggested that actual spread-widening was required to prove a conspiracy. The jury instructions expressly stated that a conspiracy could exist whether or not it succeeded and that plaintiffs did not need to prove that spreads actually widened.

The court further held that Credit Suisse’s experts did not improperly offer prohibited opinions about traders’ intent. The experts were allowed to discuss the possible meanings of jargon in the chats and non-price-fixing explanations for information-sharing, but they were not allowed to speculate about the specific intentions of individual traders. The court also rejected challenges involving testimony that the multibank chatrooms had later closed, arguments about witnesses who invoked the privilege against self-incrimination, and comments about the absence of testimony from certain class plaintiffs.

Disposition

The plaintiffs’ motion for a new trial was DENIED. The court concluded that the jury’s verdict was supported by substantial evidence and that any trial errors or questionable conduct did not warrant disturbing the verdict. The Clerk of Court was directed to close the motion at Docket Number 2022.