In an opinion yesterday, Judge Schofield dismissed a case brought purportedly on behalf of various ERISA benefit plans against banks accused of fixing prices in the FX markets. Judge Schofield ruled that the banks could not be sued under ERISA because they were not fiduciaries to the plans or even “functional” fiduciaries, but were instead mere counterparties:

Plaintiffs describe the following “typical fact pattern”: “Defendant bank A enters into an FX transaction with an ERISA plan that is tied to a benchmark rate. Defendant bank A enters into the transaction knowing full well that it is participating in an ongoing conspiracy with defendant banks B, C, and D to manipulate benchmark FX rates.” Contrary to Plaintiffs’ suggestion that such an arrangement would make bank A an ERISA fiduciary, this scenario describes a counterparty relationship between that bank and the plan to transact at a specified rate, and the plan has not granted the bank any control or authority over that rate.

Because the Complaint does not allege any indicia of control over Plan assets or an ongoing contractual relationship between any Plan and any Defendant in which the Defendant bank unilaterally decided when to enter into FX transactions and at what prices, the Complaint does not adequately plead Defendants’ authority over Plan assets.