US Court Acquits Credit Suisse of Forex Market Manipulation Charges

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Swiss investment bank (IB) Credit Suisse was acquitted of foreign exchange market manipulation charges in a U.S. court.

On the 20th (local time), according to Bloomberg News and others, at the U.S. Southern District Court of Manhattan, New York, the jury delivered this verdict regarding Credit Suisse's alleged manipulation of currency values in the foreign exchange market.

Previously, investors including pension funds filed lawsuits against Credit Suisse and 15 other global IBs, claiming losses due to currency value manipulation through online chat rooms from 2007 to 2013. While other IBs settled with investors for about $2.3 billion, Credit Suisse did not reach a settlement.

The key issue in this trial was whether an 'organized manipulation conspiracy network' based on online chat rooms actually existed and whether Credit Suisse intentionally participated in that network to conspire to manipulate the foreign exchange market. The jury found that while there was an industry manipulation network for currency value collusion, the plaintiffs failed to prove that Credit Suisse was part of that manipulation network.

The plaintiffs' attorneys argued that Credit Suisse traders participated in over 100 chat rooms, sharing information about the differences in currency trading prices (spreads) every other day. On the other hand, Credit Suisse's defense attorneys argued that the problematic chat conversations were mere posturing or jokes. They also claimed that the foreign exchange market is so large that a small number of traders in online chat rooms could not manipulate it. Accordingly, the jury ruled in favor of the defendant.

Credit Suisse, which recently suffered from a liquidity crisis, was able to breathe a sigh of relief with this verdict. Bloomberg News reported that if it had lost, potential expenses could have reached $19 billion (approximately 27.3 trillion won).