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Financial Services Law Insights and Observations

Banks Shed Libor Antitrust Claims


Consumer Finance

On March 29, the U.S. District Court for the Southern District of New York dismissed the antitrust claims brought by plaintiffs in numerous consolidated actions against 23 financial institutions over their alleged manipulation of the London Interbank Offered Rate (Libor). In re LIBOR-Based Fin. Instruments Antitrust Litig., No. 11-2262, 2013 WL 1285338 (S.D.N.Y. Mar. 29, 2013). Libor is a global benchmark rate used in financial products and transactions, which was set using data from the banks under the auspices of the British Bankers’ Association. The various consolidated suits have been brought by investors and bondholders who claim that the institutions colluded to deliberately depress Libor, which caused the plaintiffs various economic injuries. The court determined that the process by which Libor data was provided by the banks was not anticompetitive, and held that, even if the institutions’ conduct had constituted a violation of antitrust laws, the plaintiffs may only pursue antitrust claims for “antitrust injuries,” i.e. injuries resulting from any harm to competition. The court also (i) dismissed as time-barred certain commodities manipulation claims, (ii) dismissed a RICO claim because RICO only applies to domestic enterprises, and (iii) dismissed all state-law claims, some (e.g., those related to antitrust claims) with prejudice.