Our team has extensive experience in relation to FX related claims. We act for hedge funds, large corporates, fund managers, brokers, traders and other investors in relation to complex FX disputes involving issues such as rate manipulation, FX derivative losses, front-running and misuse of confidential information, and claims arising out of the EUR/CHF event.

Forex manipulation

We are ideally placed to handle claims arising out of the regulatory investigations (by the FCA and other regulators worldwide) in relation to manipulation of FX markets and rigging of bank or benchmark rates. The firm is at the cutting edge of English litigation involving benchmark fixing and manipulation and has significant experience of developing and bringing these claims, see LIBOR & ISDAfix Manipulation Claims.

Read More - Background on Forex derivatives

Many businesses have been sold complex FX derivatives as an alternative to conventional hedging strategies that would ordinarily involve the use of futures contracts. Instead, mis-sold derivatives often retain specific one-sided features that are weighted in the bank’s favour. For example, trades might be ‘knocked out’ at defined targets when in the money – which may then defeat the objective of hedging currency risk altogether. Equally, businesses can find themselves stuck with unlimited exposure to downside risk, or find themselves locked in for extended periods with significant break costs. A common feature is that if exchange rates fall outside a specific range, customers are obliged to purchase increasing amounts of currency and at uncommercial exchange rates.

Businesses are often unaware of these features until significant losses have materialised, and were sold these FX derivatives without adequate (or in some cases any) explanation of these features, their risks and the significant potential financial consequences.

Banks that sold these complex FX products are often unilaterally responsible for calculation of their ongoing valuation, close out values – and resulting customer losses. The banks’ processes will require careful scrutiny and can be open to question.

Forex derivatives mis-selling

We also advise clients in relation to claims against banks and brokers resulting from mis-selling of FX derivatives, generally arising from failed currency hedging strategies. The Brexit fallout has brought significant volatility to Forex markets, affecting sterling, euro, dollar and other major currencies. Businesses hedging their currency risks remain exposed to this volatility, and many have suffered significant losses as a result of the extreme FX rate movements. Our expert lawyers can assist businesses who have been sold highly-leveraged complex FX derivatives products.

Read More - Background on Forex derivatives

Many businesses have been sold complex FX derivatives as an alternative to conventional hedging strategies that would ordinarily involve the use of futures contracts. Instead, mis-sold derivatives often retain specific one-sided features that are weighted in the bank’s favour. For example, trades might be ‘knocked out’ at defined targets when in the money – which may then defeat the objective of hedging currency risk altogether. Equally, businesses can find themselves stuck with unlimited exposure to downside risk, or find themselves locked in for extended periods with significant break costs. A common feature is that if exchange rates fall outside a specific range, customers are obliged to purchase increasing amounts of currency and at uncommercial exchange rates.

Businesses are often unaware of these features until significant losses have materialised, and were sold these FX derivatives without adequate (or in some cases any) explanation of these features, their risks and the significant potential financial consequences.

Banks that sold these complex FX products are often unilaterally responsible for calculation of their ongoing valuation, close out values – and resulting customer losses. The banks’ processes will require careful scrutiny and can be open to question.

Primary contacts

Stephen Elam

Partner 

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