Diagrams drawn up by the Competition Commission claiming to reveal evidence of collusion on currency trading between 28 banks through their participation in chat rooms do not go far enough to prove it, the Tribunal heard yesterday.
The Competition Commission has alleged, in a case initiated in 2015, that the banks participated in a “single overarching collusion” by participating in chat rooms where information on their trading in the rand-dollar exchange rate was exchanged. The commission accused the banks of manipulating the foreign exchange market by “fixing” the price of the rand for periods between 2007 and 2013.
Legal counsel of Macquarie Bank, arguing for the allegations against the bank to be dismissed, told the Tribunal yesterday the Commission’s case against the bank rested on one line, linking a trader at Macquarie to another at Absa Bank, on one occasion, in the claimed “spider’s web” of collusion.
But, he said, no facts had been provided by the Commission of any alleged collusion on the trades of the two traders, and no evidence had been provided of Macquairie’s alleged collusion with any of the other banks implicated by the Commission.
Legal counsel of Commerzbank, also arguing for the bank’s dismissal from the case, said it was absurd for the Commission to argue that “if one participated once in a chat room” you became part of a global single overarching collusion, without providing evidence of the intent, knowledge and conduct to provide substance to such a claim.
He said when it came to the Commission’s claims of “matching prices” in currency trades as evidence of collusion, the trade in currencies was generally narrow and it was not unusual for banks to have matching prices. In addition, there was nothing that the Commission relied upon as evidence to suggest that the matching prices were unlawful, he said.
Legal counsel of two of the respondents, both owned by HSBC, said the Commission’s diagrams showed that HSBC had links with seven of the 28 banks alleged to be involved in the collusion, which meant then that it was not in collusion with the other 11 banks.
He questioned how the Commission could then claim that HSBC was part of a single overarching collusion with all of the other banks, when by its own evidence, it had only revealed chat room evidence of links with seven banks.
In addition, not one bank employee was common in all of the online chat rooms where the collusive trading allegedly took place, he said.
Legal counsel from RMB said it was impossible to infer from one set of trading data that there was a link to what was spoken of in a chat room.
He said it was also possible for traders go for a cup of tea, which might temporarily suspend their trade at a certain price, and there was no way the Commission had proven the difference between normal commercial trading and alleged collusive trading. The Commission had also not produced evidence of any agreement of the collusive trading, he said,
The Commission launched the investigation into the alleged manipulation in 2015, but after years of pursuing the case, it was sent back to the drawing board when the Competition Appeal Court ruled in 2019 that it had to file a new charge sheet against the banks.
After failed attempts by the banks to dismiss the Commission’s case against them, the authority filed its new charge sheet in June 2020, adding new banks to the allegations and including parent companies in its case.
IOL