Tuesday, May 24, 2016

US Federal Court: Private Lawsuit Can Bring 16 of the World’s Largest Criminal Banks to Their Knees

In 2007, more than a dozen of the world’s largest banks colluded to deliberately depress the rate at which they paid out on investments. This rate is known as the London Interbank Offered Rate (Libor), which is the average of interest rates estimated by each of the leading banks in London that it would be charged were it to borrow from other banks.

Financial institutions, mortgage lenders, and credit card agencies around the world, set their own rates relative to it, and at least $350 trillion in derivatives and other financial products are tied to the Libor. These mega banks suppressed Libor, during the beginning of the collapse, to boost earnings and make their bottom lines appear healthier.

This banking conspiracy to rig Libor was one of the key factors in bringing about the financial collapse of 2008. The scandal was so large, in fact, that it nearly bankrupt the planet.

After the dust had cleared, multiple investors launched lawsuits against these megabanks. However, in March of 2013, U.S. District Judge Naomi Reice Buchwald dismissed much, though not all, of this class action lawsuit directed at the banks.
Buchwald argued in favor of the banks, saying that since the LIBOR-setting process was never meant to be competitive, the suppression of that process was not anti-competitive.

This ruling was a huge win for the banks. However, a new ruling by the U.S. Court of Appeals for the Second Circuit has overturned that win.

“Appellants sustained their burden of showing injury by alleging that they paid artificially fixed higher prices,” Circuit Judge Dennis Jacobs wrote for a three-judge appeals court panel.

The revived antitrust lawsuit, according to the appeals court, could be devastating to these 16 banks, including Deutsche Bank AG, Royal Bank of Canada, Royal Bank of Scotland Group Plc, UBS AG, HSBC Holdings Plc, Barclays Plc, Credit Suisse Group AG, Bank of America Corp, Citigroup Inc., and JPMorgan Chase & Co.

http://thefreethoughtproject.com/federal-court-private-lawsuit-bring-16-worlds-largest-criminal-banks-knees/

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