Earlier this year, the U.S. Supreme Court denied an appeal brought by Bank of America, Citigroup and JPMorgan Chase to dismiss claims that they were involved in a conspiracy by the world’s largest banks to rig the London Interbank Offered Rate (Libor). Libor is an interest-rate benchmark used to value more than $300 trillion of securities worldwide.
The appeal asked the court to review whether investors had adequately claimed they were harmed by the alleged effort to drive Libor down. The Supreme Court’s decision keeps the banks on the hook for potentially billions of dollars in damages should the pending Libor suits succeed.
HSBC, Credit Suisse, Deutsche Bank and UBS are among the other banks that litigation has been filed in regard to Libor rigging. Barclays has agreed to pay $120 million to settle claims against it.
Damaged investors who urged the court to not hear the appeal argued they were “price-fixing victims bringing a classic price-fixing claim.” Their major claim was that the banks’ alleged collusion caused them to either receive a lower value or pay more for transactions involving Libor-linked securities.
As Libor litigation plays out, it will be interesting to see how other antitrust settlements involving rate-rigging like Euribor or ISDAfix influence any potential Libor settlements.
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