Evidence That Non-US Transactions Were Initiated During Business Hours in New York by Traders Following New York Holiday Schedule Supported “Plausible” Claim That Securities Transactions Occurred on US Exchange

The World in U.S. Courts: Summer 2017 - Antitrust/Competition/Foreign Trade Antitrust Improvements Act (FTAIA) | June.07.2017

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Wah v. HSBC North America Holdings Inc., US District Court for the Southern District of New York, June 7, 2017

The plaintiffs are individuals who claim to have been overcharged as a result of a conspiracy among the 17 global banks named as defendants to manipulate foreign exchange rates. In August 2016, the District Court in New York dismissed the plaintiffs’ antitrust claim, concluding the complaint alleged that the relevant transactions took place in Malaysia and Singapore, at a time when the plaintiffs resided in Malaysia, and therefore did not have an effect on US commerce sufficient to satisfy the requirements of the FTAIA. (The prior decision was discussed in the Summer-Fall Issue of The World in US Courts).

The plaintiffs attempted to amend their claim to escape the problems previously cited by the Court. Specifically, they added new allegations that they arranged the relevant transactions “by telephone directly [with] HSBC traders in the United States.” The plaintiffs believed that was the case because the phone calls were conducted very late at night in Singapore or Malaysia, but during trading hours in New York, and because of statements the HSBC traders allegedly made as to their trading day and the applicability of New York holidays.

The Court found the allegations of fact adequate to support a “reasonable inference” that the transactions were executed on a US exchange or with a US trading desk, especially in light of the rule that amendments to pleadings—in the absence of prejudice or other factors—should be “liberally granted.”

[Editor’s note: the Wah case is also addressed in the Securities Law/Commodities Exchange Act (CEA) section of this report.]

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