Brazil’s exporters’ association (AEB) is suing several foreign and domestic banks for 19bn reais ($3.77bn) over alleged manipulation of foreign exchange (FX) rates.
The banks defending against the lawsuit claiming manipulation of the Brazilian Real (R$) include ItauUnibanco, Banco Santander Brasil, HSBC, Citigroup, and BNP Paribas.
Go deeper with GlobalData
The AEB contends that Brazilian exporters were inflicted with losses worth 107.4bn reais, from banks’ purported currency manipulation between 2010 and 2011.
The AEB’s compensation calculations took into consideration that the association—which includes Brazil’s biggest exporters, such as Vale and Suzano—represents 20% of Brazilian exporters.
Sector has been plagued by lack of oversight
Citigroup remarked that its conduct adheres to all rules. HSBC (whose Brazilian unit was acquired by Banco Bradesco in 2016) refused to comment on it. Banco Santander stated that it is still oblivious of the class action, while Itau noted that it will litigate the accusations.
The association has been unable to make calculations for the period between 2008 and 2012, which it believes to be the full period that a cartel manipulated the exchange rates, according to AEB’s lawyer, Bruno Maggi.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataTrading in the foreign exchange market garners significant revenues for banks at a very low risk. Nevertheless, a lack of oversight in the FX market helped banks easily manipulate rates as early as December 2007.
Anti-trust watchdogs are now watching
While major banks continue to cooperate with pending litigations, their financials are hit by mounting legal expenses arising from settlements and increasing provisions to meet potential claims.
The accused banks are now on the radar of Brazil’s anti-trust watchdog, Administrative Council for Economic Defence (CADE). The banks are also being carefully watched by various other anti-trust bodies, resulting in heightening legal hassles for the wrongdoers.
