OTC U.S. Dollar Libor Litigation

Libor-Based Financial Instruments Antitrust Litigation

A settlement in In re: Libor-Based Financial Instruments Antitrust Litigation (the “OTC U.S. Dollar Libor Case”) has been reached with Barclays Bank plc. The claims filing deadline for this settlement is December 21, 2017.

Overview:

Banks on the U.S. Dollar panel (and their affiliates) around the world were sued by a group of their counterparties (“Plaintiffs”) who claim that the banks manipulated the U.S. Dollar LIBOR rate during the financial crisis, artificially lowering the rate for their own benefit, and that, as a result, purchasers did not receive as much interest payments for their U.S. Dollar LIBOR-based instruments from the banks as they should have. Plaintiffs in the OTC U.S. Dollar Libor Case have brought (a) antitrust claims under the Sherman Act, (b) breach of contract claims, and (c) unjust enrichment claims against Barclays and the Non-Settling Defendants.

Claims Filing Deadline:December 21, 2017
Case Name:In re: Libor-Based Financial Instruments Antitrust Litigation
Preliminarily Approved Settlement Fund:$120,000,000
Class Period:August 1, 2007 through May 31, 2010

Complexities of Transaction Data:

These instruments do not have uniform securities identifiers and are traded over the counter. These factors complicate the process for filing claims in this settlement and any related future settlements that are established. Battea will utilize its extensive experience gained through years of developing the software and infrastructure used in the trading of foreign exchange, derivative and non-derivative financial instruments, together with its proprietary search methods, to analyze all transaction data and identify eligible transactions and perfect claim filings on behalf of our clients. As we do in all cases, Battea will work with class counsel and the claims administrator to justify all claims and defend any deficiencies.

Eligible Transactions:

Financial Derivative and Non-Derivative Instruments:

The settlement relates to U.S. Dollar LIBOR-Based Instruments, which are instruments that include any term, provision, obligation or right to be paid or to receive interest based upon the U.S. Dollar LIBOR rate.

These include, but are not limited to:

  • Asset Swaps: Type of over-the-counter derivative in which one investor exchanges the cash flows of an asset or pool of assets for a different cash flow without affecting the underlying investment position.
  • Collateralized Debt Obligations (“CDOs”): Type of structured asset back security (“ABS”).  CDOs have multiple levels of risk (“tranches”) and are issued by special purpose entities.  They are collateralized by debt obligations including bonds and loans.
  • Credit Default Swaps (“CDSs”): Type of over-the-counter, credit-based derivative where the seller of the CDSs compensates the buyer of the CDS only if the underlying loan goes into default or has another credit event.
  • Forward Rate Agreements (“FRAs”): Type of over-the-counter derivative based on a “forward contract.”  The contract sets the rate of interest or the currency exchange rate to be paid or received on an obligation beginning at a future start date.
  • Inflation Swaps: Type of over-the-counter derivative used to transfer inflation risk from one party to another through an exchange of cash flows.
  • Interest Rate Swaps: Type of over-the-counter derivative in which two parties agree to exchange interest rate cash flows, based on a specified notional amount from a fixed rate to a floating rate (or vice versa) or from one floating rate to another.  Interest rate swaps are commonly used for both hedging and speculating.
  • Total Return Swaps: Type of over-the-counter derivative based on financial contracts that transfer both the credit and market risk of an underlying asset.  These derivatives allow one contracting party to derive the economic benefit of owning an asset without putting that asset on its balance sheet.
  • Options: Type of over-the-counter derivative based on a contract between two parties for a future transaction on an asset.  The other derivative instruments, defined above, can serve as the asset for an option.
  • Floating Rate Notes: Evidence of an amount of money owed to the buyer from the seller.  The interest rate on floating rate notes is adjusted at contractually-set intervals and is based on a variable rate index, such as U.S. Dollar LIBOR.

Only U.S. Dollar LIBOR-based instruments that were sold in over-the-counter transactions (OTC transactions) are included in this Settlement.

Eligible Parties:

All persons or entities (other than Barclays and the Non-Settling Defendants and their employees, affiliates, parents, and subsidiaries, etc.) that directly purchased a U.S. Dollar LIBOR-Based Instrument from Barclays or a Non-Settling Defendant (or its or their subsidiaries or affiliates) in the United States, and that owned the U.S. Dollar LIBOR-Based Instrument at any time during the Class Period.  Non-Settling Defendants include: Credit Suisse, Bank of America, JPMorgan Chase, HSBC, Lloyds, WestLB, UBS, RBS, Citizens Bank, Deutsche Bank, Citigroup, Rabobank, Norinchukin Bank, Bank of Tokyo, HBOS, Société Générale and RBC.

Note:

Additional settlements are expected with some or all of these Non-Settling Defendants in the future, which will increase the settlement fund available to claimants. Recently, a settlement agreement was reached with Citigroup contributing an additional $130 million to the preliminarily approved settlement fund. We will provide you with additional information on the claims filing process for this settlement as it becomes available.