COURT FILE NO.: CV-15-536174
DATE: 2018/10/19
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
JOSEPH S. MANCINELLI, CARMEN PRINCIPATO, DOUGLAS SERROUL, LUIGI CARROZZI, MANUEL BASTOS and JACK OLIVEIRA in their capacity as THE TRUSTEES OF THE LABOURERS’ PENSION FUND OF CENTRAL AND EASTERN CANADA, and CHRISTOPHER STAINES
Plaintiffs
– and –
ROYAL BANK OF CANADA, RBC CAPITAL MARKETS LLC, BANK OF AMERICA CORPORATION, BANK OF AMERICA, N.A., BANK OF AMERICA CANADA, BANK OF AMERICA NATIONAL ASSOCIATION, THE BANK OF TOKYO MITSUBISHI UFJ LTD., BANK OF TOKYO-MITSUBISHI UFJ (CANADA), BARCLAYS BANK PLC, BARCLAYS CAPITAL INC., BARCLAYS CAPITAL CANADA INC., BNP PARIBAS GROUP, BNP PARIBAS NORTH AMERICA INC., BNP PARIBAS (CANADA), BNP PARIBAS, CITIGROUP, INC., CITIBANK, N.A., CITIBANK CANADA, CITIGROUP GLOBAL MARKETS CANADA INC., CREDIT SUISSE GROUP AG, CREDIT SUISSE SECURITIES (USA) LLC, CREDIT SUISSE AG, CREDIT SUISSE SECURITIES (CANADA), INC., DEUTSCHE BANK AG, THE GOLDMAN SACHS GROUP, INC., GOLDMAN, SACHS & CO., GOLDMAN SACHS CANADA INC., HSBC HOLDINGS PLC, HSBC BANK PLC, HSBC NORTH AMERICA HOLDINGS INC., HSBC BANK USA, N.A., HSBC BANK CANADA, JPMORGAN CHASE & CO., J.P.MORGAN BANK CANADA, J.P.MORGAN CANADA, JPMORGAN CHASE BANK NATIONAL ASSOCIATION, MORGAN STANLEY, MORGAN STANLEY CANADA LIMITED, ROYAL BANK OF SCOTLAND GROUP PLC, RBS SECURITIES, INC., ROYAL BANK OF SCOTLAND N.V., ROYAL BANK OF SCOTLAND PLC, SOCIÉTÉ GÉNÉRALE S.A., SOCIÉTÉ GÉNÉRALE (CANADA), SOCIÉTÉ GÉNÉRALE, STANDARD CHARTERED PLC, UBS AG, UBS SECURITIES LLC and UBS BANK (CANADA)
Defendants
Louis Sokolov for the Plaintiffs
Matthew Milne-Smith for the Defendants Morgan Stanley Canada Limited and Morgan Stanley Canada Limited
Donald Houston for the Defendants Credit Suisse Group AG, Credit Suisse Securities (USA) LLC, Credit Suisse AG and Credit Suisse Securities (Canada) Inc.
Adam D.H. Chisholm for the Defendants Royal Bank of Scotland Group PLC, RBS Securities Inc., Royal Bank of Scotland N.V. and Royal Bank of Scotland PLC
Denes Rothschild for the Defendant Deutsche Bank AG
Proceeding under the Class Proceedings Act, 1992
HEARD: October 19, 2018
PERELL, J.
REASONS FOR DECISION
[1] The Plaintiffs, Joseph S. Mancinelli, Carmen Principato, Douglas Serroul, Luigi Carrozzi, Manuel Bastos and Jack Oliveira, in their capacity as The Trustees of the Labourers’ Pension Fund of Central and Eastern Canada, and Christopher Staines, sue 16 groups of financial institutions.
[2] The Plaintiffs bring a motion for an order certifying the action for settlement purposes against Morgan Stanley Canada Limited and Morgan Stanley Canada Limited (“Morgan Stanley).
[3] The Plaintiffs sue: Royal Bank of Canada, RBC Capital Markets LLC, Bank of America Corporation, Bank of America, N.A., Bank of America Canada, Bank of America National Association, The Bank of Tokyo Mitsubishi UFJ Ltd., Bank of Tokyo-Mitsubishi UFJ (Canada), Barclays Bank PLC, Barclays Capital Inc., Barclays Capital Canada Inc., BNP Paribas, BNP Paribas (Canada), BNP Paribas Group, BNP Paribas North America Inc., Citibank, N.A., Citibank Canada, Citigroup Global Markets Canada Inc., Citigroup, Inc., Credit Suisse Group AG, Credit Suisse Securities (USA) LLC, Credit Suisse AG, Credit Suisse Securities (Canada), Inc., Deutsche Bank AG, The Goldman Sachs Group, Inc., Goldman, Sachs & Co., Goldman Sachs Canada Inc., HSBC Holdings PLC, HSBC Bank PLC, HSBC North America Holdings Inc., HSBC Bank USA, N.A., HSBC Bank Canada, J.P.Morgan Canada, JPMorgan Chase Bank National Association, JPMorgan Chase & Co., J.P.Morgan Bank Canada, Morgan Stanley, Morgan Stanley Canada Limited, Royal Bank of Scotland Group PLC, RBS Securities, Inc., Royal Bank of Scotland N.V., Royal Bank of Scotland PLC, Société Générale S.A., Société Générale (Canada), Société Générale, Standard Chartered PLC, UBS AG, UBS Securities LLC and UBS Bank (Canada).
[4] In a proposed class action under the Class Proceedings Act, 1992, S.O. 1992, c. 6, the Plaintiffs allege that the Defendants conspired with each other to fix prices in the futures exchange market (“FX Market”). It is alleged that through the use of multiple chat rooms with names such as “The Cartel,” “The Bandits’ Club,” and “The Mafia,” the Defendants communicated directly with each other to coordinate their: (i) fixing of spot prices; (ii) control and manipulation of FX benchmark rates; and (iii) exchange of key confidential customer information to trigger client stop loss orders and limit orders.
[5] The Plaintiffs allege that the Defendants’ conspiracy impacted all manners of FX instruments, including those trading both over-the-counter and on exchanges.
[6] The Plaintiffs, through Mr. Staines, commenced an action by way of Statement of Claim, which was issued on September 11, 2015. The Statement of Claim pleads several causes of action against the Defendants including a statutory right of action for contraventions of Part VI of the Competition Act, R.S.C. 1985, c. C-34; namely civil conspiracy, and unjust enrichment.
[7] The Class Counsel team is made up of lawyers from Sotos LLP, Siskinds LLP, Koskie Minsky LLP and Camp Fiorante Matthews Mogerman LLP.
[8] Similar litigation has been commenced in Québec. Class Counsel in the Ontario action is working cooperatively with the law firm of Siskinds Desmeules s.e.n.c.r.l (“Siskinds Québec”), counsel to the plaintiff in the Québec action (Court File No. 200-06-000189-152), to prosecute the Québec action.
[9] Class Counsel and Siskinds Québec are working together and have agreed to pursue the litigation on a national basis with carriage in Ontario.
[10] The Plaintiffs have already reached court approved settlements with twelve groups of Defendants: (1) UBS AG, UBS Securities LLC and UBS Bank (Canada); (2) BNP Paribas Group, BNP Paribas North America Inc., BNP Paribas (Canada), and BNP Paribas; (3) Bank of America Corporation, Bank of America, N.A., Bank of America Canada and Bank of America National Association; (4) The Goldman Sachs Group, Inc., Goldman, Sachs & Co., and Goldman Sachs Canada Inc.; (5) JPMorgan Chase & Co., J.P. Morgan Bank Canada, J.P. Morgan Canada, and JPMorgan Chase Bank National Association; (6) Citigroup, Inc., Citibank, N.A., Citibank Canada, and Citigroup Global Markets Canada Inc; (7) Barclays Bank PLC, Barclays Capital Inc., and Barclays Capital Canada Inc. (“Barclays”); (8) HSBC Holdings PLC, HSBC Bank PLC, HSBC North America Holdings Inc., HSBC Bank USA, N.A., and HSBC Bank Canada (“HSBC”); (9) Royal Bank of Scotland Group PLC, RBS Securities, Inc., Royal Bank of Scotland N.V., and Royal Bank of Scotland PLC (“RBS”); (10) Standard Chartered PLC; (11) The Bank of Tokyo Mitsubishi UFJ Ltd. and Bank of Tokyo-Mitsubishi UFJ (Canada) (“Bank of Tokyo”); and (12) Société Générale S.A., Société Générale (Canada) and Société Générale (Société Générale).[^2]
[11] The Plaintiffs have now reached a settlement with Morgan Stanley and move for:
a. an order certifying this action as a class proceeding, pursuant to the Class Proceedings Act, 19992, S.O. 1992, c. 6, as amended (the "CPA"), against the Settling Defendant for settlement purposes only;
b. an order defining the "Ontario Settlement Class" as:
All Persons in Canada who, between January 1, 2003 and December 31, 2013, entered into an FX Instrument[^1] either directly or indirectly through an intermediary, and/or purchased or otherwise participated in an investment or equity fund, mutual fund, hedge fund, pension fund or any other investment vehicle that entered into an FX Instrument. Excluded from the class are the defendants, their parent companies, subsidiaries, and affiliates; provided, however, that Investment Vehicles shall not be excluded from the Settlement Class.
c. an order defining the common issue for the Ontario Settlement Class as:
Did the Settling Defendant conspire to fix, raise, maintain, stabilize, control, or enhance unreasonably the prices of currency purchased in the foreign exchange or foreign currency market (the "FX Market")?
d. an order appointing Joseph S. Mancinelli, Carmen Principato, Douglas Serroul, Luigi Carrozzi, Manuel Bastos, and Jack Oliveira in their capacity as The Trustees of the Labourers’ Pension Fund of Central and Eastern Canada (the "Labourers Fund") and Christopher Staines as the representative plaintiffs for the Ontario Settlement Class;
e. an order approving the notice plan, as proposed by the plaintiffs (the "Notice Plan");
f. an order that the Order and any reasons given by the Court in connection with it and the certification of the Ontario Action as against the Settling Defendant for settlement purposes pursuant to the Order, including, without limitation, the definition of the Ontario Settlement Class and the Common Issue, are without prejudice to the rights and defences of the non-settling defendants in connection with the ongoing Ontario Action and, without restricting the generality of the foregoing, may not be relied on by any person to establish jurisdiction, the criteria for certification (including class definition) or the existence or elements of the causes of action asserted in the Ontario Action, as against the non-settling defendants;
g. an order specifying that:
i. the Order shall be set aside, declared null and void and of no force and effect in respect of the Settling Defendant on subsequent motion made on notice in the event that the Settlement Agreement is terminated in accordance with its terms; and
ii. the Order is contingent upon a parallel order being made by the Quebec Court, and the terms of the order shall not be effective unless and until such order is made by the Quebec Court.
[12] Following arm’s length settlement negotiations, Class Counsel has reached a settlement agreement with Morgan Stanley in which it agrees to pay a total of USD$2.3 million. The Settlement Agreement provides among other things:
a. that the Settlement Amount will be held in an interest-bearing trust account for the benefit of Settlement Class Members;
b. that the costs of disseminating the Notice of Certification and Settlement Approval Hearings are to be paid by Class Counsel from the Settlement Amount;
c. that the Opt-Out Deadline has been set as part of earlier settlements and no further opt-out rights will be provide; and
d. that the Settling Defendant agrees to provide reasonable cooperation to the plaintiff class in order to assist in the continued prosecution of this action against the non-settling defendants.
[13] The court is required to certify the action as a class proceeding where the following five-part test in s. 5 of the Class Proceedings Act, 1992 is met: (1) the pleadings disclose a cause of action; (2) there is an identifiable class of two or more persons that would be represented by the representative plaintiff; (3) the claims of the class members raise common issues; (4) a class proceeding would be the preferable procedure for the resolution of the common issues; and (5) there is a representative plaintiff who: (a) would fairly and adequately represent the interests of the class; (b) has produced a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members of the proceeding, and (c) does not have, on the common issues for the class, an interest in conflict with the interests of other class members.
[14] The fact that an action is certified on consent for settlement purposes does not dispense with the need to meet the certification criteria but they may be less rigorously applied in a settlement context: Osmun v. Cadbury Adams Canada Inc., [2009] O.J. No. 5566 (S.C.J.) at para. 21.
[15] Pursuant to s. 5 (1) of the Class Proceedings Act, 1992, having reviewed the motion record, I am satisfied that all of the criteria for certification have been satisfied.
[16] Order to go as asked.
Perell, J.
Released: October 19, 2018
COURT FILE NO.: CV-15-536174
DATE: 2018/10/19
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
JOSEPH S. MANCINELLI, CARMEN PRINCIPATO, DOUGLAS SERROUL, LUIGI CARROZZI, MANUEL BASTOS and JACK OLIVEIRA in their capacity as THE TRUSTEES OF THE LABOURERS’ PENSION FUND OF CENTRAL AND EASTERN CANADA, and CHRISTOPHER STAINES
Plaintiffs
– and –
ROYAL BANK OF CANADA, RBC CAPITAL MARKETS LLC, BANK OF AMERICA CORPORATION, BANK OF AMERICA, N.A., BANK OF AMERICA CANADA, BANK OF AMERICA NATIONAL ASSOCIATION, THE BANK OF TOKYO MITSUBISHI UFJ LTD., BANK OF TOKYO-MITSUBISHI UFJ (CANADA), BARCLAYS BANK PLC, BARCLAYS CAPITAL INC., BARCLAYS CAPITAL CANADA INC., BNP PARIBAS GROUP, BNP PARIBAS NORTH AMERICA INC., BNP PARIBAS (CANADA), BNP PARIBAS, CITIGROUP, INC., CITIBANK, N.A., CITIBANK CANADA, CITIGROUP GLOBAL MARKETS CANADA INC., CREDIT SUISSE GROUP AG, CREDIT SUISSE SECURITIES (USA) LLC, CREDIT SUISSE AG, CREDIT SUISSE SECURITIES (CANADA), INC., DEUTSCHE BANK AG, THE GOLDMAN SACHS GROUP, INC., GOLDMAN, SACHS & CO., GOLDMAN SACHS CANADA INC., HSBC HOLDINGS PLC, HSBC BANK PLC, HSBC NORTH AMERICA HOLDINGS INC., HSBC BANK USA, N.A., HSBC BANK CANADA, JPMORGAN CHASE & CO., J.P.MORGAN BANK CANADA, J.P.MORGAN CANADA, JPMORGAN CHASE BANK NATIONAL ASSOCIATION, MORGAN STANLEY, MORGAN STANLEY CANADA LIMITED, ROYAL BANK OF SCOTLAND GROUP PLC, RBS SECURITIES, INC., ROYAL BANK OF SCOTLAND N.V., ROYAL BANK OF SCOTLAND PLC, SOCIÉTÉ GÉNÉRALE S.A., SOCIÉTÉ GÉNÉRALE (CANADA), SOCIÉTÉ GÉNÉRALE, STANDARD CHARTERED PLC, UBS AG, UBS SECURITIES LLC and UBS BANK (CANADA)
Defendants
REASONS FOR DECISION
PERELL J.
Released: October 19, 2018
[^1]: "FX Instruments" includes FX spot transactions, outright forwards, FX swaps, FX options, FX futures contracts, options on FX futures contracts, and other instruments traded in the FX Market.
[^2]: See: Staines v. Royal Bank of Canada, 2016 ONSC 5270; Mancinelli v. Royal Bank of Canada, 2016 ONSC 6953; Mancinelli v. Royal Bank of Canada, 2016 ONSC 7857; Mancinelli v. Royal Bank of Canada, 2017 ONSC 2324; Mancinelli v. Royal Bank of Canada, 2017 ONSC 3910; Mancinelli v. Royal Bank of Canada, 2017 ONSC 4219; Mancinelli v. Royal Bank of Canada, 2017 ONSC 5503.