Investors to pause forex litigation amid U.S. government probe

By Nate Raymond

NEW YORK (Reuters) - Lawyers pursuing an antitrust lawsuit by investors accusing 12 major banks of rigging prices in the $5.3 trillion-a-day foreign exchange market agreed to put most of the litigation on hold amid a related criminal probe by the U.S. Department of Justice.

In a letter filed in Manhattan federal court late on Monday, the Justice Department said the plaintiffs agreed to a six-month stay, with a few exceptions, on depositions and document exchanges.

The stay comes as investigations, including by a federal grand jury, continue into whether banks rigged the currency markets for more than a year.

In November, U.K. and U.S. regulators fined six banks a total of $4.3 billion after a global investigation into their failure to stop traders from trying to manipulate the foreign exchange market.

Banks including JPMorgan Chase & Co, Royal Bank of Scotland Group Plc, Citigroup Inc and UBS AG have meanwhile disclosed related investigations by the Justice Department.

JPMorgan, RBS and UBS have said they are in discussions to resolve the investigations. Representatives for the banks either declined comment or did not respond to requests for comment on Tuesday.

Peter Carr, a Justice Department spokesman, called the investigation active and ongoing. He declined further comment.

In the private litigation, JPMorgan in January became the first to reach a deal, agreeing to pay $99.5 million.

Investors accused the banks of impeding competition by conspiring to manipulate the WM/Reuters Closing Spot Rates, known as the Fix, in chat rooms, instant messages and emails.

The other bank defendants include Bank of America Corp, Barclays Plc, BNP Paribas SA, Citigroup, Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc, HSBC Holdings Plc, Morgan Stanley, RBS and UBS.

In January, U.S. District Judge Lorna Schofield rejected a bid by the banks to dismiss the case because of a lack of evidence that they had colluded to manipulate the Fix.

After that ruling, the Justice Department wrote the judge in February seeking a stay of the exchange of evidence for six months. The plaintiffs responded they understood prosecutors' concerns, but proposed a more limited stay.

As part of the agreement disclosed on Tuesday, plaintiffs would among other things still be able to obtain transaction data and some limited other information from the banks' lawyers.

A hearing is scheduled for March 26. Lawyers for the plaintiffs did not respond to requests for comment.

The case is In re: Foreign Exchange Benchmark Rates Antitrust Litigation, U.S. District Court, Southern District of New York, No. 13-07789.

(Reporting by Nate Raymond in New York. Editing by Andre Grenon)