Major banks face amended complaint over LIBOR manipulation
Some of the world’s major banks are facing an amended complaint accusing them of collusion to manipulate the London InterBank Offered Rate (LIBOR).
The amended complaint (which is the fourth amended complaint in this litigation) was filed on August 16, 2022 at the New York Southern District Court.
Plaintiffs Mayor and City Council of Baltimore, City of New Britain, Vistra Energy Corp., Yale University, Jennie Stuart Medical Center, Inc., and SEIU Pension Plans Master Trust (collectively, the “OTC Plaintiffs”), on behalf of themselves and all others similarly situated assert claims for violations of federal antitrust law, breach of contract and unjust enrichment against the defendants arising from the collusion among Defendants and the other members of the LIBOR panel to manipulate the London InterBank Offered Rate (LIBOR) from on or before August 2007 through at least August 2009.
This case arises from a global conspiracy to manipulate LIBOR—the reference point for determining interest rates for trillions of dollars in financial instruments worldwide—by a cadre of prominent financial institutions.
The list of defendant banks and co-conspirators in this litigation includes: Bank of America Corporation, Tokyo-Mitsubishi UFJ, Ltd. (n/k/a MUFG Bank, Ltd.), Barclays Bank plc, Citigroup Inc, Rabobank, Credit Suisse AG, Deutsche Bank AG, HSBC Holdings plc, JPMorgan Chase, Lloyds, RBC, SocGen, Norinchukin, RBS, UBS AG, and WestLB AG (now known as Portigon).
The complaint alleges that, throughout the Class Period, the panel banks conspired to, and did, manipulate LIBOR by misreporting the actual interest rates at which they expected they could borrow funds—i.e., their true costs of borrowing—on a daily basis. By acting together and in concert to knowingly understate their true borrowing costs, the panel banks caused LIBOR to be calculated or suppressed artificially low, reaping hundreds of millions, if not billions, of dollars in ill-gotten gains.
Investigations regarding LIBOR are ongoing in the United States, Switzerland, Japan, United Kingdom, Canada, the European Union, and Singapore by ten different governmental agencies, including the DOJ, the SEC, the FSA, and the CFTC. Additionally, numerous employees, including supervisors, traders, and brokers, from various financial institutions have been accused of improper conduct related to LIBOR.
Several panel banks, such as Barclays and UBS, have reached settlements relating to their manipulation of LIBOR and other interest rate indices that have resulted in fees, admissions, and regulatory findings.
The plaintiffs claim that the panel banks’ manipulation of LIBOR allowed them to pay unduly low interest rates to investors, including OTC Plaintiffs, on LIBOR-based financial instruments during the Class Period.
Accordingly, the OTC Plaintiffs seek relief for the damages they have suffered as a result of the panel banks’ violations of federal and state law and for injunctive relief. OTC Plaintiffs assert claims under the Sherman Act, 15 U.S.C. § 1 et seq., the Clayton Act, 15 U.S.C. § 12 et seq, and state law.