U.S. court appoints law firm to lead foreign exchange litigation

By Andrew Longstreth

NEW YORK, Feb 13 (Reuters) - A U.S. federal judge has chosenthe law firm Scott+Scott LLP to serve as interim lead counsel ina consolidated class action against many of the world's largestbanks alleging manipulation of the roughly $5.3 trillion-a-dayforeign exchange market.

At a hearing on Thursday, U.S. District Judge LornaSchofield of Manhattan chose Scott+Scott over three other groupsof plaintiffs' law firms seeking the lead spot.

In class actions, the firm serving as lead counsel is oftenresponsible for making key decisions in prosecuting a case andstands to make the most money if a case is successful.

Scott+Scott, which is headquartered in Connecticut and hasoffices in New York, Ohio and California, has 33 lawyers,according to its website.

The other groups of firms seeking the lead counsel positionhave more lawyers but Schofield suggested she was concernedabout inefficiencies and the availability of senior lawyers atthose firms to spend on the case.

"I think that a having a smaller firm that can draw on otherfirms as needed can best serve the class," she said.

Over the last few months, several lawsuits have been filedagainst major banks, such as Deutsche Bank, Citigroup, Barclays, UBS, HSBC,JPMorgan Chase & Co, and Royal Bank of Scotland.

The lawsuits claim that the banks violated federal antitrustlaw when their senior traders allegedly shared sensitive marketinformation in chat rooms to execute a variety of strategies tomove key benchmark rates.

The lawsuits allege collusion that allowed the banks toprofit at the expense of their customers.

The lawsuits seek class action status on behalf ofinvestors, institutions and others affected by the allegedmanipulation. One of the lawsuits claims that the class couldinclude thousands of currency traders who lost value on tens ofthousands of transactions, "resulting in potentially billions ofdollars in damages."

The litigation has been spurred on by governmentinvestigations around the globe. Those probes, the lawsuitsnote, have identified senior foreign exchange traders at bankswho were known in Bloomberg chat rooms as "The Cartel" and "TheBandits Club."

Schofield said she would order the Scott+Scott firm to filea consolidated complaint near the end of March. She has set aMarch 3 conference to address when the plaintiffs will be ableto receive documents from the defendants.