LIBOR is the primary benchmark for short term interest rates and occupies a crucial role in the operation of financial markets. The lawsuit, which was filed in 2011, alleges that the banks’ manipulation of U.S. Dollar LIBOR allowed them to pay unduly low interest rates to purchasers of U.S. Dollar LIBOR-based financial instruments during the global financial crisis. As a result, the banks reaped hundreds of millions, if not billions, of dollars in ill-gotten gains.
The lawsuit is on behalf of purchasers of financial instruments that paid interest indexed to U.S. Dollar LIBOR between August 2007 and May 2010 for purchases or transactions directly with the U.S. Dollar LIBOR panel banks: Credit Suisse; Bank of America; JP Morgan; HSBC; Barclays; Lloyds; WestLB; Westdeutsche Immobilienbank; UBS; The Royal Bank of Scotland; Deutsche Bank; Citibank; Coöperatieve Centrale Raiffeisen Boerenleenbank (Rabobank); The Norinchukin Bank; The Bank of Tokyo-Mitsubishi UFJ, Ltd.; HBOS; and the Royal Bank of Canada.
This lawsuit was filed on the heels of worldwide investigations by at least ten different governmental regulators, including in the United States, Switzerland, Japan, United Kingdom, Canada, the European Union, and Singapore, into banks’ conduct in the setting of LIBOR. Government regulators have collected more than $8.5 billion in fines from LIBOR-setting banks.
On February 28, 2018, the court overseeing the litigation certified a class defined as follows: “All persons or entities residing in the United States that purchased, directly from a Panel Bank (or a Panel Bank’s subsidiaries or affiliates), a LIBOR-Based Instrument that paid interest indexed to a U.S. dollar LIBOR rate set any time during the period August 2007 through August 2009 (‘Class Period’) regardless of when the LIBOR-Based Instrument was purchased.”
To date, Hausfeld has secured settlements totaling $590 million with Barclays ($120 million), Citi ($130 million), Deutsche Bank ($240 million), and HSBC ($100 million). The court has granted final approval to each of these settlements. More information about the settlements can be found at https://usdollarliborsettlement.com.
The litigation is ongoing against the other defendant banks.