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Simmtech Files Class Action in U.S. Over Forex Manipulation
By Dominic Rivera
A South Korean company has filed a class action lawsuit in the U.S. over alleged manipulation of foreign currency exchange rates by global banks.
Electronics company Simmtech has filed the lawsuit at the U.S. District Court for Southern District of New York and named Barclays, Citigroup, JP Morgan Chase, Credit Suisse, Deutsche Bank, Royal Bank of Scotland, and UBS as defendants.
Simmtech is accusing foreign exchange dealers of allegedly working together through chat rooms called The Bandit’s Club and The Cartel, and by text messages.
The class action lawsuit also alleges that some of the banks’ traders have been “trading ahead” of client orders and manipulating the rates by “pushing through trades before and during the 60-second windows when the benchmarks are set.”
WM/Reuters gathers foreign exchange trade data, then calculates and distributes the rates. It is a joint venture between The WM Company and Thomson Reuters.
“By making a high number of low-volume trades in the one-minute period before the WM/Reuters rates are calculated, a dealer can artificially increase or decrease an exchange rate by hundredths of a percent, as this exerts the most pressure possible on the published rate,” the class action lawsuit states.
Simmtech alleges that because of this manipulation, the banks can get the best trade execution for their end of the deal, with the client receiving the worst possible price, and devaluing the currency transaction.
In July, Simmtech also filed a lawsuit against Citibank because of losses they incurred in the ‘knock-in-knock-out’ currency options. The company is claiming that they were not provided with enough information about the risks.
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One thought on Simmtech Files Class Action in U.S. Over Forex Manipulation
REDWOOD OPTIONS also manipulated their software by artificially increasing or decreasing the exchange rate by hundredths of a percent causing me lose money.