Civil Antitrust Claims Reinstated Against 16 Banks in Libor Case -- Update
24 May 2016 - 4:04AM
Dow Jones News
By Nicole Hong
In a setback for some of the world's largest financial
institutions, a U.S. appeals court on Monday reinstated the private
antitrust lawsuits filed against 16 banks for allegedly rigging
Libor interest rates.
The ruling from the Court of Appeals for the Second Circuit
reverses a lower court decision from 2013, in which U.S. District
Judge Naomi Buchwald dismissed the claims in the lawsuits because
she said the banks' alleged conduct did not violate federal
antitrust laws.
The lawsuits accuse 16 major banks -- including J.P. Morgan
Chase & Co., Bank of America Corp. and Citigroup Inc. -- of
collusion in manipulating the London interbank offered rate, or
Libor, to the detriment of the banks' consumers.
The plaintiffs, who owned various financial instruments that
were affected by Libor, claim the returns on their investments were
depressed by the banks' collusion. The lawsuits were filed by
several groups of plaintiffs, including the local governments of
cities like Baltimore, San Diego and Houston.
Judge Buchwald had said the plaintiffs failed to show they were
injured by the alleged rate manipulation. She said that because
setting Libor was a "cooperative endeavor," there could be no
anticompetitive harm to consumers.
But a federal appeals court Monday disagreed and kicked the case
back to the lower court for further proceedings. A three-judge
panel found that the plaintiffs did show an antitrust injury "by
alleging that they paid artificially fixed higher prices."
If this private litigation is ultimately successful, the
potential total bill to banks could be in the billions, analysts
have estimated.
Write to Nicole Hong at nicole.hong@wsj.com
(END) Dow Jones Newswires
May 23, 2016 13:49 ET (17:49 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Citigroup (NYSE:C)
Historical Stock Chart
From Sep 2024 to Oct 2024
Citigroup (NYSE:C)
Historical Stock Chart
From Oct 2023 to Oct 2024