please the court my name is regina marquis and i represent planned beneficiaries participants and trustees of a recess benefit and pension plans the bank defendants here argue that finding them to be in the for foreign currency schemes that are alleged would quote transform nearly every arista plan counterparty or vendor into a risk of fiduciary close quote but this court should recognise that defendants misread the sure we plead that they exercise authority and control over plan assets which meets the definition of three twenty one a one in a recess all we  they managed to transfer plan assets through them's to themselves through manipulating the benchmark exchange rates for foreign currency exchanges with the plans  defendants argue that they did not set the price for those exchanges in their brief you could mean basically the plants hired them to effect currency transfers right that is correct and your complaint is that they exercised their transfer discretion in a way that resulted in them profiting that is correct ok and you say that was fraudulent we say that it was done without disclosure to the plans your honor well and still not sure i understand how fiduciary obligation to the plank you may have a fraud claim or you may have some other contract based claim but i'm not sure how they had a what their  your honor as long as the banks exercised authority and control over assets and through their manipulation of the benchmarks they managed to deceive the plans and transfer plan assets to themselves by controlling their own compensation they are exercising control over plan assets no arista plan for do sherry or their investment manager approved of the banks manipulating the benchmarks the plans were unaware that the benchmarks were going to be manipulated when they placed their foreign currency orders to be priced at the benchmark it is is your argues your argument that once the plan place the order and agreed to pay whatever exchange rate prevails the banks then have the ability and exercise the ability to to alter those rates in their own a favor and that as a result thing they work to study and so the plan assets that have been confided to them control so we argue that they had control over the plan assets i by setting or mis setting the exchange rate by manipulating the exchange rates in their favor yes your honor and i'm sorry and if i went to the bank in order to get deutsche mark so i can go to germany and they did the same thing would they be my fiduciary those would not be plan assets unless you were nature of the transaction is one in which i anticipate that the bank or any company or person i deal with is going to try to maximize their own benefit  your honor once there if if the banks negotiated an actual rate with the plans said ok the euros and dollars were going to be these transactions these currency transactions were supposed to be executed according to instructions that were given by the plant's investment managers that's correct your honor we don't have those agreements in the record right that's correct your honor but to the extent the transactions were supposed to be conducted according to the investment managers instructions what is the discretion conferred on the banks t to answer your question we believe that the banks ability to transfer plan assets to themselves by secretly manipulating the benchmarks they exercised control and authority over those plans  i'm not understanding these are you suggesting to us that if a plan managers decide to put money in a bank account the bank then has to do has a fiduciary not at all juggling i didn't think so so that's where i'm trying to figure out given that b s transactions were pursuant to a two instructions there wasn't discretion to do what they wanted with them  i would have thought that they either violated obligations of good faith that went with that contractual relationship or further engaged in fraud but not a breach of a fiduciary duty what am i missing correct your honor so i'm still having problems with where the fiduciaries relationship arises it arises because the plans x because the banks exercised authority and control they were able to transfer plan assets to themselves and under arista that level of control constitutes of the sherry status i see my time is just about up here on me ask you if if a plan it's a hypothetical if a plan  engages hires somebody to purchase an asset and the instructions are purchase the asset go go to goldman sachs and buy x quantity of this asset that person that that entity arranges with goldman sachs to increase its offered price because it would because for reasons it would be advantageous to the person who was so interested to have this price i would have to look at the exact fact pattern to answer fully but generally if you look at united teamster's plan of the magna care that fact pattern seems similar to your federal level and globally did investigate these practices and find the banks over a ten billion dollars for them so the banks have not been pursued exclusively for their practices yeah pickable regulations say that currency transactions between broker dealers and plans do not ordinarily create a fiduciary relationship that's section twenty ten point three through twenty one yes your honor that cited and you don't really respond to that i'm not sure i understand why you think that's not applicable here but first of all currency  not a security so that would not apply and i want to make clear that the courts and the department of labor make a distinction between what they call ministerial duties and and it's kind of like a continuum but what happened here is the only reason it's not a ministerial duty is that you say they engaged in a fraud otherwise if i understand you they would have just you know be one they would have been then conducting ministerial tasks it's the failure to disclose the that they were manipulating the rates and that failure to feel you disclose the entity handled where they plan assets and did the banks have authority or control over those assets and your honor we believe the ability to transfer money meets the definition under risk of the fiduciary will hear you on or about claims on the grounds that they plead no plausible basis for finding the defendant banks to be a fiduciary counsel was asked what the basis was to allege fiduciary duty and she correctly that although they were not intended or expected to be exercising control over planned assets they did exercise control secretly because when they were given an instruction and nondiscretionary instruction to exercise transactions at a rate that they had no influence over they secretly went and did things that would affect that rate in a manner beneficial to themselves and failed you failed to disclose it and in doing so they were exercising control over plant assets even though they had not been expected to have control over plant assets and were not knowingly entrusted with control plan is that a fair statement of the of the of the claim being made i think that's what the allegation is but it's important to talk about what this relationship ship it's what the banks were doing because they they they cite the arrests a provision in that and then they jump to service provider cases cases where people are holding funds depositing funds in their own accounts commingling assets writing checks on behalf of  funds that's not what happened here that's not what is alleged here the banks are dealers they are not brokers they are not investment advisors this is the judge jacobs point if you individually wanted to go change currency you're going to go to the london need some pounds you go up to the desk of j f k and you give them some dollars and they give you some pounds that's what's happening here so if if the caterpillar fund was alan participates and gets some dividends from of a london company and they need to change it into dollars they go to the street they may come to credit suisse they say how much we give me what's the hold line in other words what opposed to charging some recognized percentage fee again you're out of work we're we're taking the allegations of the misconduct as true as we have at the trial besides context of there may be again an issue if they're not a fiduciary then the risk that doesn't apply at the supreme court said in this court has recognized it's not whether the defendant committed some kind of misconduct that had an impact on the player you're assuming the respectfully i think those allegations make out a case that these banks have control we're talking about failure to disclose and other misconduct but troll of the assets if you exercise the power in secret if you exercise the power to determine the price at which at which those at which transactions in those assets will be conducted why isn't that exercise of control because it's it's an arm's length transaction here on earth where it let's say if we go to the desk to change currency let's say i go buy a cup of coffee if the if the vendor commits some kind of misconduct and  i get overcharged or there's some other impropriety that doesn't mean he has control of my money but i'm paying let's say an eight in extreme example just making the point you're interested with this money in order to change it to exchange one currency for another right if the assumption war if if we assume for a hypothetical that you all knew that a the plaintiffs would benefit to reste certain extent but if you exchanged it tomorrow you would benefit to a certain extent to their detriment  your view is that that is perfectly acceptable and that you you you can you can delay carry out your problems you contract applications to them in order to benefit yourself well that's that's not what's what's alleged i don't believe in the complaint but i do think that for you if you do share in those circumstances have you been entrusted with the money in order to exchange it without regard to benefiting yourself over the plank yet i don't i don't think we're trusted with the money in the sense of this court's cases applying to service providers for example again where and there is a line that has to be drawn and where i think the line is drawn is where the funds are deposited in in the defendant's account commingled again check writing authority of people running off with the funds that's not how this works this is a as alleged in the complaint these transactions are primarily done what tronic like so the fund manager would have a screen and they see you know barclays is offering this credit suisse is offering this and the trade gets executed this is not trusting us with their funds any more than any other arms like commercial transaction could be said to be trusting the counterparty decide when you when you're going to press the button that transfers or that exchange is this their money for a different currency you have the actual you make that decision right  hypothetical in that sense it's just electronically the problem of you having the money in your pocket and going to someone who's got to get the desired currency and trading it so for a while you do have possession or the ability to exercise control over their car or their money right in a sense perhaps in the in the electronic you thirst somehow we have it but again that's not what's alleged here these transactions are executed pursuant to the instructions often given electronically by the investment manager and that that type of hypothetical is not what they are alleging well isn't the issue that the instruction does not good morning matthew schwartz from sullivan cromwell on behalf of what the briefs refer to as the group two defendants i'd like to just take a few minutes to discuss why the district court was clearly correct in denying the plaintiff's request for yet another sixty days beyond the year plus of litigation they had to search for any contracts that they think they might have found and then plead new claims against the group two defendants for yet a fifth time first the district court was clearly within her discretion in recognizing the complaint had been amended repeatedly and that the plaintiff had numerous opportunities to locate any such contracts and plead them in the complaint the plaintiffs clearly can't excuse this pleading failure by saying that they didn't know that this was a potential help to their case the group on defendants argued very strenuously in their motion to dismiss that the plaintiffs failed to plead a fiduciary relationship that's obviously the argument we have here today and the plaintiffs obviously could have looked to contracts were thought to plead those in their complaint if they were concerned about that as an alternate ground i think based on the argument today the district court was clearly correct in saying that any attempted amendment would be futile the plaintiffs are just wrong contending that the contractual relationship between any plan and any defendant in which a defendant unilaterally decided when to enter into f x transactions and at what prices this ruling was consistent with i think the way the plaintiffs have played the relationship between the pla plants and the banks in their complaint the plaintiffs have never actually identified for anyone what the suppose a contract say why why why can't it be said that the banks decided at work prices to enter into transaction with refunds that is not what the allegations of the complaint are here but the allegations of the complaint are is that they gave instructions that bank it and to execute at certain prices and that those prices were manipulated it's why there a fraud and antitrust claims in the main action before judge schofield that has been settled so the they fix the price that they would pay correct they the plans at the plants instruct the banks the price to execute at correct and the allegation is that the banks manipulated those prices and so somehow took control of the plan assets they were instructed on the price you don't mean the price as a number in the prices or as a concept that that's in many of the cases that's correct execute fix executed this particular benchmark not the discretion execute tomorrow execute a week from now it's executed this benchmark and the grab them out of their allegations are that that benchmark was manipulated it's no different than if somebody said  gave gave somebody some money said you know go go go purchase something and they went and they purchased the exact same thing but in fact it wasn't as advertised that would be a that would be a potential fraud claim but it's not a discretion or a fiduciary duty claim you my my opponents seem to emphasize that because there was no comingling of assets for instance with with assets of the bank they infer that custody of clan assets is required to find for do sherry duty and in fact custody is not required to find control over plan assets for instance  here either to the extent that they had a contractual obligation to exchange the assets for another currency according to the facts and they get that what your grievance is is that they manipulated the f x and you didn't know they were doing that but in so far as they dealt with the plan assets they dealt with them as the plan administrator told them to which is trade them for another currency according to the why is that not an argument we should be receptive to your honor we assert that by manipulating the benchmark based on knowledge of the upcoming a risk of plan orders that is handling a plan asset and i would emphasize that the do court below did not provide an analysis of whether knowledge of those upcoming orders was itself a plan asset and that is something that we have vernon our complaint and is is briefed before you