A settlement between seven of the world’s largest banks and a handful of pension funds and municipalities was revealed to the public today.
The settlement made public on Tuesday, which requires court approval, resolves antitrust claims against Bank of America Corp (BAC.N), Barclays Plc (BARC.L), Citigroup Inc (C.N), Credit Suisse Group AG (CSGN.S), Deutsche Bank AG (DBKGn.DE), JPMorgan Chase & Co (JPM.N) and Royal Bank of Scotland Group Plc (RBS.L).
Several pension funds and municipalities accused 14 banks, including those that settled, of conspiring to rig the "ISDAfix" benchmark for their own gain from at least 2009 to 2012.
This settlement comes a little over a month after a New York judge decided that it was legal for the lawsuit to go ahead to trial.
Judge Jesse M. Furman of the federal district court in Manhattan said that institutional investors, including a pension fund from Alaska and several Pennsylvania counties, could continue to bring their antitrust claims against 14 big banks over the financial institutions’ objections. The investors allege that the banks engaged in manipulating the ISDAfix rate, which determines valuations for interest rate derivative products.
[...]
Judge Furman added that many of the claims from investors looked similar to those made against banks in other market manipulation cases, including those in litigation over the London Interbank Offered Rate.
“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,” Judge Furman wrote.
It’s never a good thing when the judge deciding whether or not a case against you has merit writes that, not only are you worth suing, you probably are guilty.
Under the accord, Bank of America will pay $50 million; Barclays will pay $30 million; Citigroup, $42 million; Credit Suisse Group AG, $50 million; Deutsche Bank AG, $50 million; JPMorgan Chase & Co., $52 million; and Royal Bank of Scotland Group Plc, $50 million.
[...]
The settling companies have agreed to provide "cooperation, transaction data, documents, proffers, and witness interviews," to be used against the seven banks that haven’t settled, according to court papers filed by the investors seeking approval of the settlement.
[My emphasis]
The above settlement is the local equivalent of being an informant in a murder trial and getting away with a plea deal of accessory after the fact—sure, you might have been guilty of the murder but you aren’t going to get nearly the punishment that we hope the next guy will get with your help in the evidentiary department. There are still numerous lawsuits to come for the banks that, along with the rest of the world’s financial institutions, have perpetrated the hugest financial scam on the humans of earth in the history of civilization.