S.African tribunal says it can't charge foreign banks in rand-rigging case (updated)

Nomura

12/06/2019 17:38

(Adds Competition Commission response)
    JOHANNESBURG, June 12 (Reuters) - South Africa's antitrust
tribunal concluded on Wednesday that it has no powers to charge
foreign banks being investigated in an exchange-rate rigging
case unless they have a presence in the country.
    Partly on that basis, the tribunal sent the case back to the
country's competition watchdog, giving it 40 days to clarify the
charges it plans to bring. It also dismissed a request from the
banks involved to have the case dropped altogether.
    In a probe that has rumbled on since 2015, the Competition
Commission has been seeking fines against 23 local and foreign
banks that it alleges colluded to coordinate activities when
giving quotes to customers buying or selling the rand and the
dollar.
    It joined a global clampdown that has led to dozens of
traders being fired and several big banks fined around $10
billion in total for rigging the level of Libor and other forex
benchmarks.
    The foreign banks being investigated without a presence in
South Africa are Bank of America Merrill Lynch International, JP
Morgan Chase & Co, Australia and New Zealand Bank Ltd, Standard
New York Securities Inc, Nomura International PLC, Macquarie
Bank Ltd, HBC Bank USA, National Association (N.A), Merrill
Lynch Pierce Fenner and Smith and Credit Suisse Securities (USA)
LLC.
    The tribunal also ordered the watchdog to confine its case
to "one of a single over-arching conspiracy" while "providing
more detail on such a conspiracy." 
    In line with common law precedent, it "found that it did not
have jurisdiction to issue an order requiring the foreign banks
to pay any administrative penalty as such an order would not be
effective," it said.
    But the commission may instead seek an order declaring the
conduct of these foreign banks with no presence in South Africa
- if found guilty -  to be anti-competitive, without issuing
penalties to them.
    With regards to foreign banks with a presence in South
Africa, fines in the event of a conviction will be calculated
based on the turnover of the representative unit in the country,
the Tribunal said.
    The commission said the tribunal's verdict "takes us closer
to the banks to respond and attend to the merits of the case." 
    "Considering that this is quite a lengthy judgment, we are
currently studying it and will respond in full once we have
applied our mind to the contents," it added in a statement.

 (Reporting by Nqobile Dludla; Editing by Hugh Lawson and John
Stonestreet)
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