Civil Antitrust Lawsuits Reinstated Against 16 Banks in Libor Case

[n2doc]

Sixteen of the world’s largest banks including JPMorgan Chase & Co. and Citigroup Inc. must face antitrust lawsuits accusing them of hurting investors who bought securities tied to Libor by rigging an interest-rate benchmark, a ruling that an appeals court warned could devastate them.

The appellate judges reversed a lower-court ruling on one issue -- whether the investors had adequately claimed in their complaint to have been harmed -- while sending the case back to consider another issue: whether the plaintiffs are the proper parties to sue, in part because their claim if successful provides for triple damages that could overwhelm the banks.

"Requiring the banks to pay treble damages to every plaintiff who ended up on the wrong side of an independent Libor‐denominated derivative swap would, if appellants’ allegations were proved at trial, not only bankrupt 16 of the world’s most important financial institutions, but also vastly extend the potential scope of antitrust liability in myriad markets where derivative instruments have proliferated," the U.S. Court of Appeals in New York said in the ruling.

Bank of America Corp., HSBC Holdings Plc, Barclays Plc, Credit Suisse Group AG, Deutsche Bank AG, Royal Bank of Canada and Royal Bank of Scotland Group Plc are also among the defendants sued in Manhattan.

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http://www.bloomberg.com/news/articles/2016-05-23/banks-are-ordered-by-court-to-defend-libor-antitrust-lawsuit

[cstanleytech]

1. Why did the court even bring up the bankruptcy potential?

I mean it shouldnt have any bearing on if they are guilty and should have to pay for it should it? After all if you do the crime you should be willing to do the time.

[gratuitous]

2. "Every plaintiff who ended up on the wrong side"

That's a rather presumptive statement, as if the winners and losers in Libor were just random acts, like who got hit with a flooding rainstorm, and who got only enough precipitation to water their lawn. I think the evidence will show that winners and losers were very carefully apportioned, and the banks made out quite handsomely because they knew that the victims would be financially powerless to hold them accountable. Which is to say the wealthy got wealthier while the poor got considerably poorer in aggregate. After all, there's only so much money you can steal from somebody who has $25 to his name (spoiler alert: it's twenty-five bucks). Under those circumstances no one individual looks all that damaged, but in total, yeah, a shit-ton of money got redistributed.