Currency Rigging Case Collapses: What South Africans Lose as Banks Win

South Africa’s rand-dollar exchange rate was allegedly rigged for profit, and for more than a decade the Competition Commission pursued 28 banks over that claim. On Tuesday, the Constitutional Court ended most of that pursuit, ruling against the regulator and clearing the majority of the banks it had targeted.

The ruling lands hard on ordinary South Africans. The commission’s legal representative, advocate Tembeka Ngcukaitobi, had argued during the appeal that the banks’ conduct “weakened the rand” and continued to negatively affect the country’s imports and exports of dollar-denominated products valued at approximately 2-trillion dollars. A weaker rand means higher prices for imported goods, heavier debt burdens on dollar-denominated contracts, and reduced purchasing power for citizens across the economy. That is the everyday stake in a case that can otherwise seem remote and technical.

The majority judgment, written by Justice Owen Rogers, effectively ended the commission’s ability to prosecute most of the banks it had targeted. The commission had initiated legal action in 2017, seeking fines of up to 10% of each bank’s South African revenue. Its case rested on evidence that local and international banks had coordinated rand-dollar trading, with some participants joining an instant messaging chat room called “ZAR Domination.”

The list of banks cleared is long. Among those who will face no further prosecution are Bank of America Europe Designated Activity Company, Australia and New Zealand Banking Group Limited, Standard Bank of South Africa, Nomura, Commerzbank, Macquarie, HSBC Bank USA NA, Merrill Lynch Pierce Fenner and Smith Incorporated, Bank of America NA, Nedbank and First Rand Bank. Credit Suisse Securities also won its appeal challenging the commission’s decision to include it in the litigation at all.

The commission did not walk away entirely empty-handed. It retains the ability to pursue cases against BNP Paribas, JPMorgan Chase Bank, HSBC Bank and Standard Americas Incorporated, a partial success that keeps some accountability proceedings alive.

The court found that the commission’s case against Standard Bank rested on incorrect factual assumptions and lacked sufficient evidence to justify further legal proceedings. Standard Bank welcomed the outcome, saying the ruling “affirms the consistent position maintained by the bank since the inception of this matter in 2017 and throughout these proceedings, that neither Standard Bank nor any of its employees was involved in a conspiracy to manipulate the rand.” The bank added that it “conducts its business with integrity and in full compliance with all applicable laws and regulations.”

What changed, in practical terms, is that the regulator’s decade-long effort to hold the country’s largest financial institutions accountable for alleged currency manipulation has been largely dismantled by the highest court in the land. The commission spent more than ten years and considerable public resources on a case that, for most defendants, ends here.

The four remaining banks still facing prosecution will now determine whether the commission can salvage any meaningful outcome from this protracted legal battle. Whether those proceedings produce the accountability the regulator originally sought, or simply extend a case already weakened by Tuesday’s ruling, remains the open question.