Seven banks, amongst which are Bank of America, Citigroup and JPMorgan Chase, have settled a class action lawsuit in New York, agreeing to pay $324 million in compensation. The amount will be distributed among the plaintiffs as the interest rates benchmark cases continue taxing big banks several years after the initial investigations and subsequent fines by various financial regulators.
Back in March the case was allowed by Judge Jesse M. Furman, who asserted that a number of institutional investors may have suffered losses as a result of the ISDAfix manipulation allegations against 14 big banks.
With the case being similar to the LIBOR investigations that have yielded similar results for a number of investors, the big banks continue to be on the hook for failing to supervise the formation of several interest rates benchmarks.
Law Firm Scott + Scott Class Action Payout Over $1.1 billion
Law firm Scott + Scott has been at the forefront of class action litigation against a number of big banks involving LIBOR, foreign exchange rates and now ISDAfix manipulation allegations. After this latest settlement, the total amount of money paid by big banks to plaintiffs represented by the law firm totals over $1.1 billion.
In January 2015 Scott + Scott settled with JPMorgan Chase & Co. and JPM Chase Bank, N.A. for $99.5 million, a case that was closely followed with a settlement in March last year. UBS AG, UBS Group AG, and UBS Securities LLC have agreed to pay $135 million to prevent further litigation against them.
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Citigroup Inc. and Citibank, N.A. settled for $394 million in May 2015, while before the current settlement, Bank of America Corporation and Bank of America, N.A. paid $180 million in April.
The ISDAfix settlement is the second largest for Scott + Scott in its class action crusade against big banks. The benchmark is used to evaluate interest rates on a variety of derivative products.
many banks conspired to rig similar benchmark rates
When allowing the case back in March, Judge Furman outlined: “It appears that that sort of rate manipulation can be economically sensible and feasible given that many banks (including some defendants) have admitted that, in approximately the same period of time, they conspired to rig similar benchmark rates — namely, LIBOR and the leading benchmark interest rate for the foreign exchange market — in order to maximize profits.”
The banks which were defendants in the case were Bank of America Corp., Barclays PLC, BNP Paribas SA, Citigroup Inc., Credit Suisse, Deutsche Bank, Goldman Sachs Group Inc., HSBC Holdings PLC, JPMorgan Chase & Co., Morgan Stanley, Nomura Holdings Inc., the Royal Bank of Scotland Group PLC, UBS AG and Wells Fargo & CO.