South Africa's Top Court Clears Path for Landmark Bank Rigging Case

Traders at major banks allegedly coordinated to rig the rand-dollar exchange rate for seven years. That allegation, first lodged in 2015, has now survived its highest legal test, though in a considerably narrower form.

On Tuesday, June 30, South Africa’s Constitutional Court ruled that the Competition Commission can proceed with its foreign exchange manipulation case against six banks. Justice Owen Rogers delivered the judgment, which sends the dispute back to the Competition Tribunal of South Africa for substantive proceedings.

The ruling dramatically reduces the case’s reach. The Commission had originally pursued allegations against 28 local and global institutions. After the Constitutional Court rejected many of the Commission’s arguments challenging an earlier Competition Appeal Court ruling, just six banks remain in the firing line: Investec, the Anglo-South African banking giant; BNP Paribas; JPMorgan Chase and Co; JPMorgan Chase Bank NA; Standard Americas Incorporated; and HSBC Bank.

The case has been grinding through the system for a decade. The Commission initiated the complaint in 2015 and referred it to the Competition Tribunal in 2017. Since then, the matter has passed through two separate rounds of proceedings at both the Tribunal and the Competition Appeal Court before reaching the Constitutional Court.

At the heart of the dispute is an assertion that traders at numerous South African and global banks engaged in coordinated activity to manipulate the rand-dollar exchange rate across a seven-year window spanning 2007 to 2013. The Commission contends that this collusion harmed market integrity and affected parties relying on fair exchange rates during that period.

Meanwhile, several major African banking institutions have successfully exited the litigation. FirstRand and the Standard Bank of South Africa, both significant players in the continent’s financial sector, are among those excluded from the action following Tuesday’s decision.

A Commission spokesperson indicated the regulator was still reviewing the judgment in detail and would provide a comprehensive response at a later date, suggesting further analysis was underway before the Commission outlines its next steps. More information on the case is available at https://www.africanlawbusiness.com/news/major-south-africa-forex-rigging-case-moves-forward/

The Commission has also been active on other regulatory fronts. Last month, it referred a separate complaint against Adcock Ingram Critical Care to the Competition Tribunal, alleging excessive pricing practices in the renal dialysis market. That action reflects the regulator’s broader mandate to investigate anticompetitive conduct across multiple sectors of the South African economy.

The forex case now enters its next phase with a smaller defendant pool. What remains unresolved is whether the evidence of alleged trader coordination at the six remaining institutions, spanning those years between 2007 and 2013, will ultimately prove sufficient for the Tribunal to find against them.