Posted: October 23, 2020

LIBOR Class Action: Settlement Update

We write to update you on recent updates regarding settlement in In Re: Libor-Based Financial Instruments Antitrust Litigation, 11-MD-02262 (“In re Libor“), the Multi-District Litigation in the Southern District of New York relating to relating to manipulation of LIBOR or the London Interbank Offered Rate for the U.S. dollar.

Before going into the latest updates on settlement, it worth recalling from one of our previous posts that there are several different classes of plaintiffs that have sought class certification in In re Libor:

Over-the-Counter (“OTC”) Plaintiffs: generally consists of persons or entities in the United States who bought an interest rate swap or bond/floating rate note directly from a panel-member bank (or one of its affiliates) that required that panel-member bank to pay interest at a rate tied to the 1 or 3 month LIBOR rate.

Lender Plaintiffs: generally consists of lending institutions headquartered in the United States that originated, held, or purchased loans, or purchased or sold interests in loans tied to LIBOR between August 1, 2007 and May 31, 2010.

Exchange-Based Plaintiffs: generally consists of those who purchased or sold Eurodollar futures contracts or call options on Eurodollar dollars, or bought put options on them on the Chicago Mercantile Exchange on or between certain specified dates.

Finalized Class Action Settlement with OTC Plaintiffs

On October 5, Judge Buchwald approved class action settlements with related affiliates of defendant banks HSBC Bank PLC, Barclays PLC, JPMorgan Chase Bank, N.A., Bank of America, N.A., and Citibank, N.A. and related affiliates. The Order came after the Court conducted a telephonic fairness hearing.

The definitions of the classes differ slightly from defendant group to defendant group; depending on the defendant group, the settlement class with include either those who “purchased or otherwise acquired” a “U.S. Dollar LIBOR-Based Instrument,” or those who “transacted in” a “U.S. Dollar LIBOR-Based Instrument.”

The definitions also differ as to whether the class members owned the instrument in question, or whether the “instrument paid interest based upon U.S. Dollar LIBOR” during the Class Period. For all class definitions, however, the Class Period is the same: August 1, 2007 through May 31, 2010.

For all settlement classes, the transactions in question are the same “Non-Defendant OTC Financial Institutions”: Ally Financial Inc.; American Express Company; Bancwest Corporation; The Bank of New York Mellon Corporation; BB&T Corporation; BBVA Compass Bancshares, Inc.; BMO Harris Bank, N.A.; Capital One Financial Corporation; Fifth Third Bancorp; Goldman Sachs Group, Inc.; Harris Financial Corporation; Keycorp Cleveland; M&T Bank Corporation; Metlife, Inc.; Morgan Stanley; Northern Trust Corporation; The PNC Financial Services Group, Inc.; Regions Financial Corporation; State Street Corporation; Suntrust Banks, Inc.; The Toronto-Dominion Bank; Unionbancal Corporation; U.S. Bancorp; and Wells Fargo & Company.

Judge Buchwald’s Order finds the settlements to be “fair, reasonable, and adequate” and to have met the requirements of Rule 23 of the Federal Rules of Civil Procedure. Law360 reports that the settlement amounts to “nearly $22 million,” with an additional $6.1 million being awarded to Plaintiffs’ attorneys. According to Law360, the settlement agreements also require each bank to provide “significant cooperation.”

Proposed Class Action Settlement with Lender Plaintiffs

On October 15, counsel for the putative class of Lender Plaintiffs also filed a motion for the Court to approve a class action settlement with Deutsche Bank AG for $425,000. The proposed class would consist of those “lending institutions headquartered in the United States . . . that originated loans, held loans, held interests in loans, owned loans, owned interests in loans, purchased loans, purchased interests in loans, sold loans, or sold interests in loans with interest rates based upon U.S. Dollar LIBOR . . . which rates adjusted at any time between August 1,2007 and May 31, 2010.” The settlement agreement also requires Deutsche Bank AG to provide cooperate against other defendants by way of document production.

Please watch this blog for any updates on Court approval of this proposed Class Action settlement.

This post was written by John F. Whelan.

We welcome your feedback. If you have questions or comments about this post, please e-mail John M. Lundin, the Manipulation Monitor’s editor, at jlundin@schlamstone.com or John F. Whelan at jwhelan@schlamstone.com or call John Lundin or John Whelan at (212) 344-5400.

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