The Royal Bank of Scotland, Barclays and HSBC are bracing themselves for a multi-million pound lawsuit from a US legal firm after they manipulated the foreign exchange (forex) market.
The part-taxpayer owned RBS has already been hit with a £430million fine - among penalties totalling almost two billion dollars (£1.3 billion) to settle a civil action relating to the scandal in the US.
Other banks involved included JP Morgan and Citigroup.
Connecticut-based Scott + Scott now has the banks in their sights after it won an agreement that saw a number of major banks pay investors almost two billion dollars (£1.3 billion) to settle a civil lawsuit tied to allegations that traders manipulated the currency market.
Now the law firm's managing partner David Scott is in London, before travelling to Paris and Berlin, talking to major firms who want to launch a European action.
He said complainants are likely to include multinational businesses, pension funds and even central banks, although he would not say if the Bank of England is involved in the case.
Mr Scott said: "To date every regulator in the world has found a number of banks guilty of manipulating forex rates, with damages suffered by the clients amounting to billions of dollars. We are already being contacted by investors and firms to help assess their losses."
Mr Scott told the BBC: "We have met with central banks and they have expressed an interest - they are interested in the institutional knowledge that we have gained litigating the forex case in the United States.
"We have developed a model that allows us to give a pretty good idea of what their damages are if they traded foreign currency."
The Financial Conduct Authority and other world regulators fined six major banks in November, including RBS and HSBC, £2.6 billion over forex rigging.
Traders under swashbuckling nicknames such as the ''3 musketeers'' were found to have clubbed together to rig forex.
In May Barclays also agreed a £1.53 billion fine with US and UK authorities amid a raft of new settlements with banks over their involvement in the rigging of global currency markets in the latest scandal to engulf the industry.
Mr Scott said: "The people who are ultimately the victims of the conspiracy do not know it, because you cannot have a good conspiracy unless it is well concealed."
He added that because the foreign exchange market "is so large, the banks and traders did not need to bludgeon somebody over their head to steal their money".
Mr Scott said: "They just needed to make small paper cuts and bleed people very slowly - because each of those cuts in a market this large ultimately leads to a very large pot of money. The customers had no idea they were being defrauded."
Scott + Scott expects to launch its European complaint in the autumn.
Meanwhile, the former chairman of HSBC has said the bank should have taken more care before the purchase of a Swiss private banking business that allegedly allowed customers to dodge taxes.
In evidence to the House of Lords Economic Committee, Stephen Green added that they should also have carried out due diligence on a Mexican business that breached anti-money laundering rules.
He said: "With the benefit of hindsight, it would have been better to have drilled into the detail much earlier. We didn't get everything right."
The twin scandals damaged HSBC's image and Mr Green's reputation. It came after the bank had come through the 2008 financial crisis relatively unscathed.
HSBC had to pay a record $1.9bn (£1.21bn) fine in 2012 after the US said it had become the preferred financial institutions for drug traffickers and money launderers.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article