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U.S. appeals court revives Libor-rigging claims against banks -Breaking


© Reuters. FILE PHOTO – A mask is worn by a woman near New York Stock Exchange, NYSE, in New York City, U.S.A. March 4, 2020. REUTERS/Brendan McDermid/File Photo

Jonathan Stempel

NEW YORK (Reuters] – The U.S.Appeals Court revived Thursday the lawsuit accusing a host of large banks and other financial institutions of conspiring against the Libor benchmark interest rate to increase investors’ profits.

The 2nd U.S. Circuit Court of Appeals, Manhattan stated that a lower court judge was competent to hear antitrust claims made by investors. Charles Schwab (NYSE:) Corp which bought Libor-based products at banks or Libor futures on Chicago Mercantile Exchange.

Circuit Judge Richard Sullivan, without deciding on merits of the case, said that accusations against bank executives and managers from the United States ordering suppression of Libor gave jurisdiction under a conspiracy theory of liability.

After U.S. District Judge Naomi Reice Buchwald, Manhattan, had rejected investor claims in 23 cases arising from the decade-old litigation, this theory was adopted by the appeals court.

Thursday’s decision by three judges, comprising 43 pages, revived many claims. The appeals court returned the cases to Buchwald for further proceedings.

A panel of judges was composed by banks defendants.

These included Bank of America (NYSE :), Bank of Tokyo Mitsubishi UFJ and Bank of America. Barclays (LON:), Citigroup (NYSE:), Credit Suisse (SIX:), Deutsche Bank (DE:), HSBC and JPMorgan Chase, (NYSE:), Lloyds Banking Group, (LON:), NatWest.

The oral arguments were held in May 2019. Lawyers representing investors and banks did not respond immediately to inquiries for comment.

Libor or the London Interbank Offer Rate has been the foundation of many trillions of transactions. It included $265 trillion in the first 2021.

You can use it to determine interest rates for student loans, credit cards and mortgages.

The benchmark is being scrapped on Jan. 1, 2022 in the wake of rate-rigging that led to fines for several banks.

This rate will be replaced with alternative rates, which are preferably recommended by multiple banks and based upon actual transactions.

In re Libor Based Financial Instruments Antitrust Litigation 2nd U.S. Circuit Court of Appeals. 17-1569. 17-1915. 17-1989. 17-2347. 17-2351. 17-2352. 17-2360. 17-2346. 17-2351. 17-2352. 17-2360. 17-2376. 17-2377. 17-2347. 17-2352. 17-2360. 17-2376. 17-2381. 17-2383. 17-2413.