(Reuters) — A U.S. judge has chosen the law firm Scott & Scott L.L.P. to serve as interim lead counsel in a consolidated class action against many of the world's largest banks alleging manipulation of the roughly $5.3 trillion-a-day foreign exchange market.
At a hearing on Thursday, U.S. District Judge Lorna Schofield of Manhattan chose Scott & Scott over three other groups of plaintiffs' law firms seeking the lead spot.
In class actions, the firm serving as lead counsel is often responsible for making key decisions in prosecuting a case and stands to make the most money if a case is successful.
Scott & Scott, which is headquartered in Connecticut and has offices in New York, Ohio and California, has 33 lawyers, according to its website.
The other groups of firms seeking the lead counsel position have more lawyers but Judge Schofield suggested she was concerned about inefficiencies and the availability of senior lawyers at those firms to spend on the case.
"I think that a having a smaller firm that can draw on other firms as needed can best serve the class," she said.
Over the last few months, several lawsuits have been filed against major banks, such as Deutsche Bank A.G., Citigroup Inc., Barclays P.L.C., UBS A.G., HSBC Holdings P.L.C., JPMorgan Chase & Co., and Royal Bank of Scotland P.L.C.
The lawsuits claim that the banks violated federal antitrust law when their senior traders allegedly shared sensitive market information in chat rooms to execute a variety of strategies to move key benchmark rates.
The lawsuits allege collusion that allowed the banks to profit at the expense of their customers.
The lawsuits seek class action status on behalf of investors, institutions and others affected by the alleged manipulation. One of the lawsuits claims that the class could include thousands of currency traders who lost value on tens of thousands of transactions, "resulting in potentially billions of dollars in damages."
The litigation has been spurred on by government investigations around the globe. Those probes, the lawsuits note, have identified senior foreign exchange traders at banks who were known in Bloomberg chat rooms as "The Cartel" and "The Bandits Club."
Judge Schofield said she would order the Scott & Scott firm to file a consolidated complaint near the end of March. She has set a March 3 conference to address when the plaintiffs will be able to receive documents from the defendants.