Barclays in $20 mn class-action Libor settlement
British bank Barclays agreed to pay $20 million to settle a class-action suit from investors who lost money in the Libor interest rate-rigging conspiracy, according to a US court filing.
The banking giant also agreed to cooperate with plaintiffs as they seek damages against other large financial institutions over manipulation of the London Interbank Offered Rate, according to a filing Wednesday in a US district court in New York.
Kirby McInerney, which represents plaintiffs in the case, said the Barclays agreement could be an "ice-breaker" deal that encourages other firms to settle in the multinational rate-rigging case.
Defendants in the class-action lawsuit include Citigroup, Credit Suisse, JPMorgan Chase and HSBC.
Under the settlement with Barclays, which must be approved by a US court, plaintiffs agreed to drop the British bank from the suit in exchange for $19.98 million.
Barclays will also provide plaintiffs attorneys with direct communications on Libor between it and other financial institutions and with documents that show that Barclays was aware of the other banks' planned Libor submissions.
Plaintiffs have alleged that large banks involved in the Libor scandal made hundreds of millions, if not billions, of dollars in "ill-gotten gains" by suppressing borrowing rates of the critical Libor benchmark between 2005 and 2010.
Defendants "surreptitiously bilked" lenders, according to an April 2012 class-action complaint that listed 16 companies in the conspiracy.
The London Interbank Offered Rate (Libor) is the rate banks charge each other for short-term loans, and it underpins an estimated $300 trillion of transactions worldwide.
© 2014 AFP