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LIBORIn re: LIBOR-Based Financial Instruments Antitrust Litigation
MDL 2262, U.S.D.C., Southern District of New York May 2012
Hausfeld LLP represents The Mayor and City Council of Baltimore and the City of New Britain Firefighters’ and Police Benefit Fund in a class action lawsuit alleging a global conspiracy by member banks of the British Bankers’ Association (“BBA”) to manipulate LIBOR (the London InterBank Offered Rate). LIBOR is a daily benchmark interest rate at which designated contributor panel banks predict they can borrow unsecured funds from other banks in the London wholesale money market for fifteen different maturities ranging from overnight to one year. As the primary benchmark for short term interest rates globally, LIBOR occupies a crucial role in the operation of financial markets. The plaintiffs, and the class they seek to represent, are purchasers of financial instruments that paid interest indexed to LIBOR from August 2007 through May 2010.
The BBA established LIBOR based on the rates that designated banks for each currency would have to pay for an unsecured loan for each designated maturity period. LIBOR is set by the BBA and its member banks. The plaintiffs allege that the defendants knowingly understated their true borrowing costs, and by doing so, they caused LIBOR to be calculated or suppressed at artificially low rates. The plaintiffs allege that the defendants’ manipulation of LIBOR allowed them to pay unduly low interest rates to purchasers of LIBOR-based financial instruments. As a result, the defendants reaped hundreds of millions, if not billions, of dollars in ill-gotten gains.
This lawsuit comes on the heels of governmental investigations regarding LIBOR that are ongoing in the United States, Switzerland, Japan, United Kingdom, Canada, the European Union, and Singapore by ten different governmental agencies, including the U.S. Department of Justice, the Securities and Exchange Commission, and the Commodities Futures Trading Commission. Additionally, numerous employees, including supervisors, traders, and brokers, from various financial institutions have been accused of improper conduct related to LIBOR.
The defendants, which are the banks that served on the U.S. dollar LIBOR panel of the BBA during the alleged conspiracy and their corporate affiliates, are: Credit Suisse Group AG; Bank of America Corporation; Bank of America, N.A.; JP Morgan Chase & Co.; JP Morgan Chase Bank, N.A; HSBC Holdings plc; HSBC Bank plc; Barclays Bank plc; Lloyds Banking Group ;plc; WestLB AG; Westdeutsche Immobilienbank AG; UBS AG; The Royal Bank of Scotland Group plc; Deutsche Bank AG; Citibank NA; Citigroup Inc.; Coöperatieve Centrale Raiffeisen Boerenleenbank B.A.; The Norinchukin Bank; The Bank of Tokyo-Mitsubishi UFJ, Ltd.; HBOS plc; and Royal Bank of Canada.
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