LIBOR Manipulation Settlements

LIBOR-Based Financial Instruments Antitrust Litigation, No 11-md-02262

Settlement Fund:                                     $590 million (expected to be billions once additional Defendants settle)
Settlement Period:                                   August 2007 – May 2010
Open/Pending Claim Filing Deadline(s): $240 million via Deutsche Bank - TBD; $100 million via HSBC - TBD

Previous Claim Filing Deadlines: December 21, 2017 ($120 million fund via Barclays); March 29, 2018 ($130 million fund via Citibank)

Settling Defendants:
Barclays, Citibank, Deutsche Bank, HSBC

Remaining Defendants:
Barclays Bank, Credit Suisse Group; Bank of America; JPMorgan Chase; Lloyds Banking Group; WestLB; UBS; RBS; Citizens Bank; Rabobank; Norinchukin; HBOS; Société Générale; RBC; and Bank of Tokyo.


Overview

It is alleged that some of the world’s largest banks colluded to manipulate the London Interbank Offered Rate (LIBOR), the world’s leading short-term interest rate benchmark. LIBOR is used as a reference point to set interest rates for a variety of financial products, from simple loans to complex derivatives. Defendants are accused of conspiring to have manipulated LIBOR at artificially low levels. Plaintiffs allege that this manipulation reduced competition, inaccurately reflected risk in the financial system, and decreased investment yields for class members. Defendants are accused of using the following methods of manipulation:

  • Submitting artificially low rates that did not accurately reflect the banks’ actual borrowing costs.
  • Using strategies such as ‘bunching’ their rate submissions around lower price targets to ensure the effective rate would be suppressed when calculated by Reuters.
  • Suppressing LIBOR during the financial crisis to reflect better creditworthiness and financial strength, allowing banks to negotiate better rates on individually negotiated products.
  • Colluding via private chat rooms, sharing trading strategies and confidential order information.

This class action follows other government led settlements with a number of the same banking institutions regarding LIBOR manipulation and other related allegations. In these past actions, banks have paid over $6 billion in fines and penalties to U.S. and U.K. government agencies.


Eligibility

All organizations, entities or persons that purchased in the United States, directly from a Defendant (or Defendants’ affiliates), a Qualified U.S. Dollar LIBOR-Based Instrument and that owned the U.S. Dollar LIBOR-Based Instrument any time during the Eligibility Period (August 2007 - May 2010).

  • Qualified U.S. Dollar LIBOR-Based Instrument
    • Any term, provision, obligation or right to be paid or receive interest based upon the U.S. Dollar LIBOR rate. Instruments include, but are not limited to: interest rate swaps, asset swaps, collateralized debt obligations, credit default swaps, forward rate agreements, inflation swaps, total return swaps, options, and floating rate notes.

*Does Not include an instrument that includes only a term, provision or obligation or right to pay interest based on the U.S. Dollar LIBOR rate, such as a business, home, student or car loans, or credit cards.


Information is Required

All eligible clients must provide information to MCAG to qualify you for reimbursement from these LIBOR Settlements.

We can submit an initial filing on your behalf, which does not represent any obligation on your part; rather, it allows you to take advantage of this opportunity. We will withdraw your claim if you do not wish to continue, or if you do not provide necessary information in time.

As noted above, these settlements cover common LIBOR-Based instruments with any of the eighteen Bank Defendants. The most common instruments are credit default swaps and interest rate swaps.

Below is an example of required information for swap transaction that can be found in a confirmation letter or monthly/quarterly/annual statement:

  • Defendant Paying LIBOR: UBS
  • Effective Date (Month/Day/Year): 9/10/06
  • Maturity/Cancellation Date (Month/Day/Year): 9/10/14
  • Tenor & Currency of LIBOR: 3-Month USD LIBOR
  • Notional Amount: $20,000,000
  • Frequency of LIBOR payment periods: Quarterly
  • Any non-standard terms: Only necessary if standard (actual/360) terms were not used

Recommended Next Steps

Connect us with a member of your Treasury Department so an MCAG representative can describe the information that is necessary to complete your claim for the LIBOR Settlements. We typically only need a 5-10 minute call. Then you can reap the benefits of LIBOR Settlement funds that are currently available, and those that will be in the future.

You can contact MCAG 800-355-0466 or settlements@mcaginc.com.