SEVEN of the world’s biggest banks have agreed to pay $US324million ($F664m) to settle a private US lawsuit accusing them of rigging an interest rate benchmark used in the $US553trillion ($F1134t) derivatives market.
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.
Companies and investors use ISDAfix to price swaps transactions, commercial real estate mortgages and structured debt securities.
The alleged illegal activity included the execution of rapid trades just before the rate was set each day, called “banging the close,” causing the British brokerage ICAP Plc (IAP.L) to delay trades until they moved ISDAfix where they wanted, and posting rates that did not reflect market activity.
Under the settlement, payments would include $US52m ($F106m) from JPMorgan; $US50m ($F102m) each from Bank of America, Credit Suisse, Deutsche Bank and RBS; $US42m ($F86m) from Citigroup and $US30m ($F61m) from Barclays.
The remaining defendants are BNP Paribas SA (BNPP.PA), Goldman Sachs Group Inc (GS.N), HSBC Holdings Plc (HSBA.L), Morgan Stanley (MS.N), Nomura Holdings Inc (8604.T), UBS AG (UBSG.S), Wells Fargo & Co (WFC.N) and ICAP, lawyers for the plaintiffs said.
Spokespeople for BNP Paribas, HSBC, Morgan Stanley and UBS declined to comment. The other non-settling defendants did not immediately respond to requests for comment.
Tuesday’s accord came five weeks after US District judge Jesse Furman in Manhattan refused to dismiss the lawsuit.
US and European regulators have also examined whether ISDAfix was set properly, and Barclays agreed last May to pay a $US115m ($F239m) fine to settle a US Commodity Futures Trading Commission probe.
