Banking & Finance

Citi, Deutsche Bank, HSBC agree to pay US$132 million to settle Libor claims

Settlement comes after a US class action brought by futures traders accusing the three of manipulating the Libor benchmark interest rate

PUBLISHED : Friday, 13 October, 2017, 8:38pm
UPDATED : Friday, 13 October, 2017, 8:57pm

Citigroup, Deutsche Bank and HSBC Holdings have agreed to pay a combined US$132 million to settle a US class action brought by futures traders accusing them of manipulating the Libor benchmark interest rate, according to a US court filing on Wednesday.

Citi, Deutsche Bank and HSBC agreed to pay US$33.4 million, US$80 million and US$18.5 million, respectively, according to the filing in Manhattan federal court. The settlements must be approved by US district judge Naomi Reice Buchwald.

The money would go to proposed classes consisting of anyone who traded in Eurodollar futures on exchanges, including but not limited to the Chicago Mercantile Exchange, between January 1, 2003 and May 31, 2011, according to the filing.

“We are pleased the matter is resolved,” said HSBC spokesman Rob Sherman.

Citi and Deutsche Bank could not immediately be reached for comment. A lawyer for the plaintiffs declined to comment.

Banks use Libor, or the London Interbank Offered Rate, to set rates on hundreds of trillions of dollars of credit card, mortgage, student loan and other transactions, and to determine the cost of borrowing from one another.

The futures traders’ lawsuit is among many brought by various investors in Manhattan courts accusing banks of colluding to rig rates or prices in various financial and commodities markets.

Rate rigging has led to billions of dollars of regulatory fines against banks worldwide.