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Bates White LIBOR work reaches milestone
Bates White was retained to work in the LIBOR-based Financial Instruments Antitrust Litigation on behalf of a class of over-the-counter plaintiffs—the OTC class—that filed a class action lawsuit against the global banks that set US Dollar LIBOR. On February 28, 2018, the Honorable Judge Buchwald at the District Court of Southern District of New York announced the ruling on class certification, certifying the OTC class.
Bates White Partner Dr. B. Douglas Bernheim was retained as the expert for the putative class of purchasers of LIBOR-linked OTC financial instruments—the class of OTC plaintiffs. LIBOR stands for London Interbank Offered Rate and is a critical barometer of the interbank borrowing market and the broader banking sector. A panel of global banks sets LIBOR each day by answering the question, "At what rate could you borrow funds, were you to do so by asking for and then accepting interbank offers in a reasonable market size just prior to 11 am?" The class-action lawsuit alleges that the LIBOR panel banks colluded to suppress their LIBOR submissions, causing LIBOR to be artificially low and thereby harming investors. Dr. Bernheim submitted two expert reports in the matter. Using a rigorous econometric model, he analyzed data and established damages for all class members. The reports focused on quantifying the magnitude of the suppression, that is, the difference between actual LIBOR and the but-for LIBOR absent of artificiality, and whether all members of the class were impacted by the suppression.
A class certification hearing was held on January 18, 2018, and the ruling was released on February 28, 2018. The OTC class is the only plaintiff class that was granted certification. There have been four settlements reached by the OTC plaintiffs with Barclays, Deutsche Bank, Citigroup, and HSBC, totaling $590 million.