The court handling the FX benchmark antitrust case released a letter last week from the Department of Justice asking for a limited stay in the discovery phase of this case citing a grand jury investigation that is currently under way. After an initial six month stay the DOJ would then decide if a longer stay is required. The court gave both sides in the case until Friday to respond to the DOJ's request.
One would expect the plaintiffs view to be along the justice delayed is justice denied theme. The banks' position may not be as clear. Although delaying a case with a foreseen bad outcome may generally be preferable, they would also need to weigh how a quicker trial here might affect the DOJ's case, which apparently is against several bank employees involved with the fix. Different banks may have different views. An additional layer of complexity is due to additional reported probes by the DOJ into the FX practices of certain banks, including in FX structured products, and the affect on these from a delay.
Until discovery of bank documents and depositions of bank employees occurs, a more clear picture of the potential size of damages to the banks cannot be determined.
Promotion of Ethics, Simplicity and Transparency in Finance
