The United States Supreme Court has agreed to hear an appeal in Ellen Gelboim et al v. Bank of America Corp. The lawsuit was filed by bond investors who lost money in securities tied to the London Interbank Offered Rate and the manipulation of the global benchmark interest rate. Now, the nation’s highest court is granting their request to let their claims go forward and will hold oral arguments on the lawsuit during its next term.
For the last three years, different kinds of investors have filed numerous securities fraud cases against the largest banks in the world claiming that they manipulated Libor. Last year, a district court judge allowed investors to pursue certain claims but threw out their antitrust claims.
Judge Naomi Reice Buchwald said that the settling of Libor was not competitive but, rather, cooperative; it involved banks providing data to a trade group that established the rate. Plaintiffs therefore could not prove that anticompetitive behavior harmed them.
However, a group of bond investors whose claims only had to do with antitrust violations filed an appeal to Buchwald’s ruling with the 2nd U.S. Circuit Court of Appeals. That court threw out the appeal over lack of appellate jurisdiction. The reason for this, said the 2nd circuit, was that the district court did not dismiss all related consolidated complaints.
The investors then went to the Supreme Court. They noted that appeals courts are split over if and when dismissing a consolidated action is an “appealable final order.” The investors believed that their Libor lawsuit was the “ideal” one for resolving this divide.
Also last month, Judge Buchwald ruled that Eurodollar futures traders could accuse Rabobank Group and Barclays Plc (BARC) of using Libor to obtain trading advantages. Buchwald granted the traders request to include these claims in their securities lawsuit.
The plaintiffs are investments funds. They claim that banks, including Citigroup Inc. (C), Credit Suisse Group AG (CSGN), and Bank of America (BAC), artificially suppressed the rate to conceal the risie in borrowing costs. Buchwald said that the funds could argue that they either didn’t earn enough for selling Eurodollar futures contracts on certain dates or they paid too much for them. Their lawsuit is one of a multitude of lawsuits that interrelated and claim that banks acted to depress Libor.
Buchwald however, dismissed Societe Generale SA (GLE) as a defendant. She said that the allegations against the bank were submitted too late. She noted that the plaintiffs must still contend with numerous obstacles, including showing that actual damages resulted because of the banks’ “improper conduct.”
Please contact our securities fraud lawyers today so we can help you determine whether you have reason to pursue a claim. The assessment is free.
Eurodollar Traders Can Revise Libor Manipulation Claims, Bloomberg, June 24, 2014
U.S. Supreme Court to hear Libor antitrust appeal, Reuters, June 30, 2014
More Blog Posts:
R.P. Martin To Pay $2.2M in Libor Rigging, Institutional Investor Securities Blog, May 22, 2014
Barclays Settles Two Libor-Related Securities Cases, Institutional Investor Securities Blog, April 16, 2014
Deutsche Bank, Royal Bank of Scotland Settle & Others for More than $2.3B with European Union Over Interbank Offered Rates, Institutional Investor Securities Blog, December 24, 2013