Exchange-based investors have asked a New York federal judge to approve $151.9 million in settlements reached with several banks in multidistrict litigation (MDL) that alleges a scheme to manipulate the London Interbank Offered Rate (Libor) benchmark. The investors sent a letter to U.S. District Judge Naomi Reice Buchwald, seeking permission to file a motion for preliminary approval of separate settlement agreements inked with Deutsche Bank AG, Citigroup Inc., Barclays PLC and HSBC PLC. They said in a memorandum supporting the expected motion that the settlements combined make them one of the largest of their kind. The memorandum said: “Here, the proposed settlements are, in aggregate, one of the largest in the history of Commodity Exchange Act manipulation cases.”
The exchange-based investors, which include investment manager Metzler Investment GmbH, transacted in eurodollar futures and options on the Chicago Mercantile Exchange. Under the various agreements, Deutsche Bank will pay them $80 million, Citigroup will pay $33.4 million, Barclays will pay $20 million, and HSBC will pay $18.5 million, according to the memorandum. The settlements with Deutsche Bank, Citigroup and HSBC were all finalized in July and cover a proposed class period spanning from Jan. 1, 2003, through May 31, 2011. The settlement with Barclays was agreed to in October 2014 and received preliminary approval from the court the next month. But Judge Buchwald declined to certify a class at the time. This recent motion said Barclays’ agreement would be modified to harmonize the class period with that of the other banks.
In addition to the monetary considerations, the agreements all provide for continued access to documents and transactional data related to “Eurodollar unsecured borrowings or loans in the London interbank market,” which the motion said would assist the investors in their continued litigation against the Defendants in the cases that are not settling.
The litigation arises from a multiyear investigation into banks’ alleged rigging of Libor, which tracks how much banks charge one another to borrow funds. Investigations by government regulators around the world sparked a series of lawsuits that eventually were combined into multidistrict litigation in New York’s Southern District.
In December 2016, Judge Buchwald preliminarily approved a $120 million “ice-breaker” settlement between Barclays and a group of investors that directly purchased financial instruments tied to the Libor rate from August 2007 and May 2010. These “over-the-counter Plaintiffs” include Yale University and Baltimore city officials. In August the same group agreed to a $130 million settlement with Citigroup.
The case is Metzler Investment GmbH et al. v. Credit Suisse Group AG et al., (case number 1:11-cv-02613) and the MDL is In re: Libor-Based Financial Instruments Antitrust Litigation, (case number 1:11-md-02262) both in the U.S. District Court for the Southern District of New York.