Seven US banks to pay $324m to settle suit

Washington, May 4

Seven big banks, including Bank of America, JP Morgan, Credit Suisse and Deutsche Bank, have agreed to pay a total of $324 million to settle a lawsuit accusing them of market manipulation of interest rates.

The settlement yesterday followed a federal judge’s ruling in March, admitting the class action lawsuit brought by investors and pension funds against the banks.

In all, about 15 banks were named in the suit for alleged manipulation of the ISDAfix rate, the benchmark for interest rate derivatives.

US District Judge Jesse Furman, in rejecting a motion to dismiss the suit, said the claims were similar to those made against some of the same banks involving manipulation of the London interbank offered rate, or Libor, lawyers for the plaintiffs said.

“It appears 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 fix similar benchmark rates — namely, Libor and the leading benchmark interest rate for the foreign exchange market in order to maximise profits,” Furman was quoted as saying by the plaintiffs’ lawyers. — AFP