Competition Commission seeks to join nine more banks in forex trading case
The need to properly spend public funds calls for nine banks accused of manipulating the rand-dollar exchange rate to be joined in a case against 23 other banks that have already been charged by the Competition Commission, the Competition Tribunal heard on Monday.
It would also be convenient for all banks facing the same charge to be in the same room to avoid a multiplicity of actions.
Advocate Tembeka Ngcukaitobi SC, for the commission, made these arguments in support of the case to join the nine other banks.
They are HSBC Bank USA, Merrill Lynch Pierce Fenner & Smith Inc, Bank of America NA, Credit Suisse Securities (USA) LLC, Nedbank Group Ltd, Nedbank Ltd, FirstRand Ltd, FirstRand Bank Ltd and Standard Americas Inc.
The commission wants the nine banks to be joined with other banks facing the allegations, including Bank of America Merrill Lynch International Limited, BNP Paribas, Citibank NA and Standard Chartered Bank.
“On costs, we say it is plain that if the commission does not join additional litigants, it needs to litigate separately against each of the respondents who oppose joinder.
“You must ask whether public funds used by the commission and tribunal will be spent properly by additional claims that will be launched. It seems clear to us on consideration of costs, you must allow the joinder,” Ngcukaitobi said.
The conduct, which is the subject of investigation, was allegedly carried out via the exchange of competitively sensitive information on the electronic messaging platforms used for currency trading.
The commission said this enabled the banks to co-ordinate their trading activities when quoting customers who buy or sell currencies.
It said this co-ordination had the effect of eliminating competition among the banks, as it enabled them to charge an agreed price for a specific amount of currency.
Advocate Alfred Cockrell SC, for HSBC Bank USA, opposed the joinder, and argued the commission had no jurisdiction over the bank. He said HSBC USA was a pure peregrinus, namely a foreign company with no presence in SA.
Advocate Paul Farlam SC, representing Merrill Lynch Pierce Fenner & Smith Inc (MLPFS) and Bank of America NA, also opposed the joinder. He said MLPFS was a pure foreign peregrinus.
Farlam said the commission had not shown the tribunal has personal jurisdiction over it.
“Its objection is identical [to HSBC USA],” Farlam said.
He said if there was no triable case against the accused, the tribunal could not join the party.
The hearing continues.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.