14 years after the fact, CompCom’s rand manipulation case is nowhere near conclusion

The Competition Tribunal last week heard objections from many of the banks accused of being part of a conspiracy to manipulate the rand.
Competition Commission aims to prove a conspiracy based on evidence comprising 158 chats between 28 participating banks over a seven-year period. Image: Moneyweb

The question before the Competition Tribunal this week was whether 28 local and foreign banks had a case to answer in their alleged manipulation of the rand, starting in 2007.

That was 14 years ago, and the Competition Commission cannot say with certainty whether the “overarching conspiracy” between traders from the banks to manipulate the rand has come to an end.

The Competition Commission launched its case in 2015, and since then there have been two rounds of arguments before the Competition Tribunal – in 2018, and 2021, when the accused banks argued their objections and ‘exceptions’ to the commission’s case.

These are all technical arguments, before the substance of the case has even been argued, suggesting we are nowhere near a conclusion to the case. A date has still not been set for trial, when the banks, their executives and forex traders can be questioned on their knowledge of and role in the alleged conspiracy.

Last week’s arguments marked another glacial step forward in what may turn out to be the longest and most complex case in the tribunal’s history.

Legal representatives for the banks argued, for the second time in three years, why the Competition Commission’s case should not succeed.


The commission argues in its court papers that traders from competing banks were invited to join Bloomberg chatrooms such as Old Gits and ZAR where they received assistance from other traders to profit, reduce risk and avoid making losses when engaged in foreign exchange trading with the USD/ZAR currency pair.

As Moneyweb previously reported, traders from participating banks are alleged to have been in frequent and regular contact and communication with traders from other banks via Bloomberg chatrooms to co-ordinate their trading activities, provide each other with information and reach understandings on trading strategies.

The commission recently expanded the number of banks believed to have been part of the conspiracy from 19 to 28.

It has asked the tribunal to join all 28 banks to the complaint, and dismiss the banks’ objections and exceptions.

One can only guess at what this case is costing the banks in terms of legal bills. Some of the country’s top silks have been conscripted to gnaw away at the commission’s case, and they seemed to have earned a good chunk of their money last week.

It appeared for a time that the commission was on the ropes, as the banks argued that its case was vague, lacking detail and, in some cases, jurisdiction.

But the commission’s spokesperson Siyabulela Makunga tells Moneyweb it remains confident that its case will prevail, and that the tribunal will agree with it that there was an overarching conspiracy to manipulate the rand.

While the banks’ lawyers might have painted their clients as saints, there is an extensive history of forex and bond market manipulation involving many of the world’s biggest banks.

It stretches credulity to believe that traders from competing banks would be invited to join chatrooms for entirely innocent purposes, and that is the challenge facing the commission – to prove a conspiracy based on evidence comprising 158 chats between 28 participating banks over a period of seven years.

Ambitious undertaking

Some Moneyweb readers have written in with their tales of horror at the hands of the local banks’ forex departments, but piecing all this together into a conspiracy case is an ambitious project, as some of the banks’ lawyers pointed out this week.

Here’s a list of some recent market-rigging cases against some of the world’s major banks:

  • In 2017, Citibank agreed to pay an administrative penalty of R69.5 million for its part in the forex rigging case, and to cooperate with the commission in prosecuting other banks.
  • In 2019, the New York Department of Financial Services (DFS) fined Standard Chartered Bank $40 million (R635 million) for attempting to rig transactions in foreign exchange markets between 2007 and 2013. The offending chatroom in that case was ‘Old Gits’, which featured prominently in the arguments before the Competition Tribunal this week. This chatroom was described by one member as “a den of thieves” in the New York case.
  • This follows previous fines totalling $3.14 billion that New York has levied against Barclays Bank, BNP Paribas, Credit Suisse, Deutsche Bank, and Goldman Sachs to resolve unlawful conduct in the foreign exchange trading business.
  • In May 2021, the EU imposed fines of €371 million R6.6 billion) on Nomura, UBS and UniCredit for breaching EU anti-trust rules by participating in a cartel for European government bonds. Also in 2021, Bank of America Merrill Lynch, Crédit Agricole, and Credit Suisse were slapped with a €28.5 million (R509 million) fine for similar cartel conduct in the bond markets.
  • In 2019, the EU slapped fines of €1.07 billion (R19.1 billion) against five banks – Barclays, Royal Bank of Scotland, Citigroup, JPMorgan and MUFG (formerly Bank of Tokyo-Mitsubishi) – for colluding to rig the spot forex markets.

How the banks argued

Michelle Norton, representing Credit Suisse, says the commission has alleged a conspiracy of boundless scope. The harm is alleged to have occurred in chatrooms, yet there is nothing in its referral affidavit suggesting all chats were sinister. She argued that the complaint against Credit Suisse should be dismissed.

It was pointed out to the tribunal that traders are sometimes both buyers and sellers of a forex pair, and are therefore mischaracterised as competitors, when in fact they are counterparties in a trade. What is prohibited by law is the fixing of a price with the aim of eliminating competition.

Mark Wesley, arguing for RMB, said the commission could not establish RMB’s participation in the single overarching conspiracy (SOC), while the commission’s heads of argument suggests participation in a chat does not in itself establish an SOC. Without this there could be no cases against RMB. He, too, argued that the complaint against RMB should be dismissed.

Frank Snyckers, legal counsel for Standard Chartered Bank, argued that the commission’s case assumed there was one big snake, meaning one big conspiracy, yet the particulars on its claim show the main alleged collaborators only represented a maximum of five banks. The commission went for an ambitious gamble that the tribunal would let them get away with arguing that all 28 banks were involved in a conspiracy, when its arguments do not support this.

A question that needed asking was what do banks get out of a conspiracy as suggested by the commission? “Yes, if there’s a conspiracy, they get less volatility than would occur if there is a competitive arrangement, otherwise they get nothing,” said Snyckers.

Other legal representatives for the banks attacked the alleged lack of evidence presented by the commission.

In one case the commission mentions a 53-second window when forex prices were fixed, and in other cases, chats happened late on a Sunday or early Monday. The banks have seized on what they perceive as a lack of specific detail pointing to a conspiracy, as well as vague accusations and unidentified conspirators who were alleged to be in on the game.

There seems little doubt the case will go ahead, perhaps minus one or two of the banks claimed to be part of the conspiracy. But don’t expect a conclusion anytime soon.



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