Market interest rates are not "market"! JPMorgan Chase (JPM.US), UBS (UBS.US) and others are suspected of manipulating libor and subject to U.S. jurisdiction

Time:2021-12-31 Source: 903 views Trending Copy share

Zhitong Finance APP learned that the Federal Court of Appeals in New York ruled that JPMorgan Chase (JPM.US), UBS (UBS.US) and other multinational banks were subject to US jurisdiction for suspected manipulation of the London Interbank Offered Rate (Libor) .


On Thursday, a panel of three judges ruled that if other members of the collusion take steps to advance the plan in the United States, the US courts can exercise "conspiracy jurisdiction" (conspiracy jurisdiction) against these banks. The appellate court overturned the 2016 ruling of U.S. District Judge Naomi Reice Buchwald. She rejected the accusation on the grounds that her court lacked jurisdiction over the bank defendant.

Buchwald is in charge of a lawsuit involving multiple regions, including dozens of antitrust lawsuits filed by institutional investors, including municipalities and public pension funds, alleging Libor manipulation. While 16 accused, there are many banks headquartered in the United States, but they are by themselves in the UK involved in the Libor pricing membership of a group Bankers Association (British Bankers' Association) in.

However, the Court of Appeal pointed out that there is evidence that executives based in the United States instructed employees suspected of manipulating Libor. The judges cited an email in which an executive of JPMorgan Chase in New York allegedly told the bank’s Libor author to “don’t do too low” when setting interest rates and emphasized keeping up with peers. The importance of "consistency".

In another email cited by the Court of Appeals, a U.S. employee of Citibank (C.US) allegedly told the bank’s Libor submitter, “We should play a leadership role to bring Libor back to a more reasonable level. ."

U.S. Circuit Judge Richard Sullivan wrote on behalf of the three judges: "The plaintiff claimed to have taken public action in the United States to advance the suppression of collusion; this is sufficient to establish personal jurisdiction at this stage of the litigation."

This judicial ruling was a victory for the plaintiff, but the Court of Appeal made an unfavorable ruling against investors and supported Judge Buchwald’s ruling, namely Charles Schwab (SCHW.US) and a group of purchases of libor from third parties. The bondholders of the relevant bonds lack the legal status to initiate antitrust lawsuits against these banks .

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