Jeffrey Alberts Discusses Barclays $50M Settlement with Law360
Partner Jeffrey Alberts, head of Pryor Cashman’s White Collar Defense and Investigations Practice, spoke to Law360 for its February 18, 2016 article, “Barclays Pays $50M to Settle NY Forex Rigging Claims.”
Law360 reports that Barclays PLC has agreed to pay $50 million to settle claims that it misused a system intended to block stale foreign exchange prices as a way to boost the bank’s profits while hurting clients. The plaintiff was Axiom Investment Advisors LLC.
Along with the cash payout, Barclays has agreed to provide information that Axiom believes will help pursue claims against other banks that engaged in similar “Last Look” practices.
Such practices involved putting holds on foreign exchange orders that gave Barclays time to evaluate if the price a customer sought to pay was outside a certain range. If that price was deemed unprofitable for Barclays, Axiom stated that Barclays would enter a worse price or cancel trades with little or no explanation.
Axiom’s suit was filed in late November, less than two weeks after Barclays was fined $150 million by the New York Department of Financial Services and was forced to fire its global head of electronic fixed income, currencies and commodities automated flow trading for misconduct using the Last Look system.
Alberts told Law360: “If not for the NYDFS fine, Axiom may have had a harder time making their case. Because the bank signed off on the department’s consent order, which included factual allegations of wrongdoing involving the Last Look system, it opened itself up for subsequent lawsuits brought by private parties.”
Having spent six years as a prosecutor with the U.S. Attorney’s Office for the Southern District of New York, Alberts said he understands the government’s desire for justice and the need to wrap up the case with an appropriate penalty and by getting a defendant to admit that what they did was wrong.
“But for the bank, that very often doesn’t wrap things up,” Alberts said.
