By Na Jeong-ju



A Korean firm has filed a suit against a group of global banking groups, including Citigroup, JPMorgan Chase, Barclays and UBS, in New York, alleging it suffered heavy losses due to their "manipulation" of foreign exchange rates.



The global banks are currently being investigated by financial regulators of the United States, Britain and other countries for colluding to rig the currency exchange rates, interest rate swaps as well as the London Interbank Offered Rate (LIBOR), which is used as the benchmark rate for mortgages and loans around the world.



Simmtech, an electronics parts manufacturer based in Cheongju, North Chungcheong Province, said it's among hundreds of victims that were "deceived" by the banks.



"We've filed the damage suit with a court in New York because they violated the state's regulations and U.S. laws banning such collusion," a Simmtech spokesman said.



"As there are numerous Korean firms which suffered damage from their unlawful practices, more lawsuits are expected to be filed against the banks."



The firm is being represented by a U.S. law firm Kim & Bae.



This is the first suit submitted by a Korean firm against the global banks regarding the currency manipulation case, the spokesman said.



A similar case is currently being reviewed by the U.S. federal court.



The retirement pension fund for city workers in Haverhill, Mass., filed a lawsuit against the global banks in November, claiming it suffered damage from their illegal currency trading.



The fund claimed traders from the banks discussed their upcoming transactions in online chat rooms or instant-messaging sites in an apparent bid to rig the exchange rates. They called themselves members of "The Bandits' Club" and "The Cartel," according to the fund.



Global firms currently being investigated regarding this fraud case include Citigroup, JPMorgan Chase, Goldman Sachs, Barclays, HSBC, UBS, Royal Bank of Scotland and Deutsche Bank.



Simmtech is among scores of Korean firms which suffered heavy losses from investment in the so-called knock-in-knock-out (KIKO) currency options in the late 2000s.



The derivative became one of the most compelling examples of immorality in the banking sector after investors ㅡ mostly small and mid-size firms ㅡ suffered trillions of won in investment losses. The options are designed to protect buyers from the Korean won's surge against the U.S. dollar, but the won actually fell sharply during the 2007-08 financial crisis, pushing many firms to the brink of collapse.



In August, Simmtech filed a separate suit against Citigroup in the U.S., claiming it was not given a full explanation about the potential risks of the currency options when Citibank Korea sold them to the firm.



The firm claimed the parent firm should be responsible for the products sold in Korea because it was involved in the development of the products and shared profits from the sale.



Citibank Korea issued a statement immediately thereafter, saying "This case is without merit and we will fight it vigorously."



The Financial Supervisory Service (FSS) punished nine banks, including Citibank Korea and SC Bank Korea, as well as 72 bankers in 2011 regarding the sale of the KIKO options.



