Barclays PLC has agreed to pay nearly $20 million to settle a class action accusing the British bank of manipulating the LIBOR benchmark interest rate. In a letter to District Judge Naomi Reice Buchwald, in a New York federal court, lawyers for the Plaintiffs said that Barclays has agreed to pay $19,975,000 and provide class members with additional information to use in their remaining claims against other defendants.
The settlement is the first in the case which accuses several banks of manipulating the London Interbank Offered Rate (LIBOR). This came more than two years after Barclays in 2012 paid U.S. and U.K. regulators a total of $450 million to settle claims it rigged the LIBOR and the Euro Interbank Offered Rate. In a motion accompanying their letter to Judge Buchwald, lawyers for the Plaintiffs urged Judge Buchwald to grant preliminary approval to the settlement. They believe this will serve as an “ice breaker” to encourage other Defendants to settle with the class.
The settlement will resolve all claims between Barclays and class members who transacted in LIBOR-based Eurodollar futures contracts or options on exchanges such as the Chicago Mercantile Exchange between Jan. 1, 2005, and May 31, 2010. The Plaintiffs stated in a motion filed with the court:
The settlement involves a unique combination of consideration. This includes substantial, all-cash monetary compensation. It includes valuable cooperation that will enable plaintiffs to add party defendants, add many new specific allegations against existing defendants, and otherwise improve plaintiffs’ claims.
The case arises from a series of lawsuits first filed in 2011 and consolidated before Judge Buchwald in 2012. Although the Plaintiffs had initially alleged violations of the Sherman Antitrust Act, Judge Buchwald dismissed the antitrust claims from the consolidated suit in March 2013. At that time, the judge said that the Plaintiffs couldn’t point to any actual competition-related injuries, pointing out that the BBA-rate submission process was not designed to be a competitive one. She later ruled in August the Plaintiffs should not be able to revive their antitrust allegations because their lawyers already had the opportunity to strengthen their claims when filing their consolidated complaints.
After the Second Circuit refused to hear appeals concerning the dismissed antitrust claim, another group of LIBOR Plaintiffs filed a petition with the U.S. Supreme Court, asking the high court to decide whether a dismissed suit in a consolidated action can be immediately appealed, even if claims still remain in the larger case. Arguments in that case are set for Dec. 9. The case is in the U.S. District Court for the Southern District of New York.
Source: Law360.com
