Seven big banks have resolved a U.S. lawsuit accusing them of rigging ISDAFix rates, which is the benchmark for appraising interest rate derivatives, structured debt securities, and commercial real estate mortgages, for $324M. The banks that have reached a settlement are:
· Barclays PLS (BCS) for $30M (In 2015, Barclays paid $115M to U.S. Commodity Futures Trading Commission to resolve charges of ISDAfix rigging.)
· Bank of America Corp. (BAC) for $50M
· Credit Suisse Group AG (CS) for $50M
· Citigroup Inc. (C) for $42M
· JPMorgan Chase & Co. (JPM) for $52M
· Deutsche Bank AG (DB) for $50M
· Royal Bank of Scotland Group plc (RBS) for $50M
The deal must be approved by a Manhattan federal court. The defendants had sought to have the case dismissed, but US District Judge Jesse Furman in Manhattan refused their request. stating that the case raised “plausible allegations” that the defendants were involved in a conspiracy together.
Still under purview of investigation for alleged ISDAFix rigging are:
· Goldman Sachs Group Inc. (GS)
· BNP Paribas
· HSBC Holdings Plc (HSBC)
· Nomura Holdings Inc. (NMR)
· Morgan Stanley (MS)
· Wells Fargo & Co. (WFC)
· UBS Group AG (UBS)
· ICAP, which used to be the administrator for ISDAfix rates.
The banks are accused of colluding with one another to manipulate the rates. They purportedly would swiftly execute trades right before the rate was to be determined and delayed trade processing until it was fixed. This let the banks rig the payments made for derivatives trades to investors. Such a move would have adversely affected trillions of dollars of financial instruments linked to ISDAfix rates.
A district court judge allowed investors, which included municipalities and pension funds, to file breach-of-contract and antitrust claims against most of the defendants over the alleged ISDAfix rigging.
Our securities law firm works with institutional investors and high net worth individual investors in pursuing their fraud losses in arbitration, mediation, and through the court. Contact The SSEK Partners Group today.