Tag Archives: Normura Holdings

Banks Ordered to Defend Suit Claiming Benchmark Rate Was Rigged

  • Suit by Alaska pension fund can proceed to trial, judge rules
  • Bank of America, Barclays accused of rigging ISDAfix rate

Bank of America Corp., Barclays Plc and a dozen more banks must face investor claims that they rigged a benchmark used in the sales of interest-rate derivatives and other financial instruments.

U.S. District Judge Jesse Furman in Manhattan Monday rebuffed the banks’ request to throw out antitrust lawsuits accusing the institutions of colluding to set ISDAfix, affecting trillions of dollars of financial instruments. The rate is used to set prices on interest-rate swap transactions, commercial real-estate mortgages and other securities.

An Alaska pension fund and other investors raised “plausible allegations that a conspiracy among the defendants existed,” Furman said in a 36-page ruling. He allowed antitrust and breach-of-contract contract claims to proceed to trial, while throwing out other allegations.

Starting in 2009, the banks used electronic chat rooms and other means of private communication to set ISDAfix, typically submitting identical rate quotes, investors said in their suit. They are seeking billions in losses tied to the alleged rate-fixing scheme.

John Yiannacopoulos, a Bank of America spokesman, had no immediate comment on Furman’s ruling. Kerrie Cohen, a Barclays spokeswoman, declined to comment.

Many Banks

Investors also named as defendants Deutsche Bank AG, BNP Paribas SA, HSBC Holdings Plc, Royal Bank of Scotland Group Plc, Credit Suisse Group AG, UBS AG, Goldman Sachs Group Inc., Nomura Holdings Inc., Wells Fargo & Co. and JPMorgan Chase & Co.

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