In case you missed it late Friday, big banks win again.
[Note: This is unrelated to Freddie Mac's Libor lawsuit filed recently.]
Judge Finds For Banks, Dismisses Most Claims In Libor Lawsuits
A judge on Friday dismissed a "substantial portion" of claims facing a number of banks in a barrage of lawsuits accusing them of interest-rate rigging. U.S. District Judge Naomi Reice Buchwald in Manhattan ruled for the banks, which include Bank of America, JPMorgan Chase and others, of allegedly manipulating the London Interbank Offered Rate, commonly known as Libor.
The judge granted the banks' motion to dismiss the plaintiffs' federal antitrust claims and partially dismissed their claims of commodities manipulation. She also dismissed racketeering and state-law claims.
The decision is a significant setback for private plaintiffs, whose lawsuits had been consolidated before the New York judge as part of a multidistrict proceeding.
In a 161-page opinion, Buchwald said she recognized her ruling might be "unexpected," since several defendants had paid billions of dollars in penalties to government regulatory agencies. But she said unlike government agencies, private plaintiffs needed to meet many requirements under the statutes to bring a case.
"Therefore, although we are fully cognizant of the settlements that several of the defendants here have entered into with government regulators, we find that only some of the claims that plaintiffs have asserted may properly proceed," she wrote.
More than a dozen banks and brokerages are under investigation by regulators worldwide for manipulating benchmark rates such as Libor, which have been the basis for more than $550 trillion in financial products.
Three banks have reached settlements with authorities to date. Most recently, Royal Bank of Scotland agreed to pay $612 million to U.S. and British authorities. UBS agreed in December to pay $1.5 billion. Barclays agreed to pay $453 million in June.