Pandemic May Disrupt Discovery In Credit Suisse Forex Case

Law360 (March 17, 2020, 2:42 PM EDT) -- Counsel for investors and Credit Suisse cited the COVID-19 pandemic Monday when they asked a New York federal judge to push their discovery deadlines in a suit over alleged foreign exchange market manipulation by nine weeks.

In a letter to U.S. District Judge Lorna G. Schofield, attorneys for both sides in the long-running litigation said that in light of the threat to public health posed by the novel coronavirus, as well as the disruptions it has caused in air travel, continued discovery efforts would be risky and exceedingly difficult.

"This extension will allow the parties to postpone pending depositions to protect health and minimize travel while the parties assess the ongoing developments related to COVID-19," the attorneys said. "The parties agree they will suffer no prejudice from this extension. The parties only make this request in light of the exceptional circumstances at hand."

The parties said they are willing to submit a joint status update to Judge Schofield on May 14 indicating whether any other schedule modifications are needed. Discovery in the case against Credit Suisse AG, the lone nonsettling major bank implicated in a scheme to fix foreign exchange spreads and manipulate prices, has stretched across borders, and the attorneys expect that scheduled depositions in London and the U.S. over the next two months could be impeded by the COVID-19 spread.

The letter noted that the federal government has placed restrictions on air travel to the U.K. and additional measures could be on the way that would make travel either difficult or outright prohibited, or leave attorneys either stranded abroad or quarantined upon return.

"And, of course, underlying it all is the health threat posed by COVID-19," the attorneys told Judge Schofield.

The coronavirus pandemic has already led the U.S. District Court for the Southern District of New York, along with a slew of other federal district courts, to postpone trials and restrict access for foreign travelers.

Approval from the judge would push all current discovery deadlines to June, starting with the cutoff for depositions of Credit Suisse's experts. Where every other major bank has agreed to pay a combined $2.3 billion in settlements, Credit Suisse alone is denying the investors' conspiracy claims.

The sprawling litigation stems from government investigations into the banks' foreign exchange trading activities, which revealed traders inside the banks had conspired to rig the $6 trillion foreign exchange market from at least 2007 until 2013. Several of the banks ultimately forked over billions of dollars in fines after pleading guilty to criminal antitrust violations.

Investors targeted 16 banks — including Bank of America Corp., Barclays Bank PLC, BNP Paribas, Citigroup Inc. and Morgan Stanley — in a proposed class action in 2013, saying they manipulated the benchmark rates used in foreign exchange transactions involving millions of dollars' worth of their assets.

Investors won partial certification for their class action in September and are pursuing claims of a conspiracy to widen spreads in the so-called spot market, a conspiracy they’re hoping to show involved Credit Suisse.

Counsel for the investors and Credit Suisse did not immediately respond to requests for comment Tuesday.

The investors are represented by Christopher M. Burke of Scott + Scott Attorneys at Law LLP and Michael D. Hausfeld of Hausfeld LLP.

Credit Suisse is represented by David G. Januszewski, Herbert S. Washer, Elai Katz, Jason M. Hall and Sheila C. Ramesh of Cahill Gordon & Reindel LLP.

The suit is In re: Foreign Exchange Benchmark Rates Antitrust Litigation, case number 1:13-cv-07789, in the U.S. District Court for the Southern District of New York.

--Additional reporting by Nadia Dreid, Bonnie Eslinger, Reenat Sinay and Elise Hansen. Editing by Abbie Sarfo.

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