Arent Fox partner Les Jacobowitz is not a class actions guy. He's a finance guy, among other things. And before a client alerted him to a proposed $120 million settlement with Barclays in a class action over its role in the London Inter-Bank Offered Rate manipulation, he wasn't aware settlement talks were even occurring.

“I have a day job,” he told the New York Law Journal. “I wasn't following this stuff.”

That changed with the notice of the preliminary settlement with the class of over-the-counter interest rate swaps purchasers. Jacobowitz may not have been aware of what was going on in the specific suit, but he had a very clear sense of what had happened with LIBOR.

Jacobowitz has experience dealing with swaps, which were at the heart of the manipulation of the key interest rate by the 17 banks who helped set it. Hundreds of trillions of dollars in derivatives depended on the rate. U.S. investigators and their colleagues overseas were investigating wrongdoing by 2011. A number of banks ultimately settled with authorities over their part in manipulating LIBOR. In 2012, Barclays paid $453.6 million in fines to the U.S. government. Another bank, UBS, would pay $1.2 billion.

When Jacobowitz was alerted by a client to the $120 million class settlement in 2017, he was stunned.

“I said, holy smokes,” he said.

On Tuesday, Jacobowitz will argue in a hearing on behalf of the Virgin Islands Public Finance Authority that a proposed settlement, this time with Citigroup for $130 million, is unfair to plaintiffs, who should be eligible for far more money. According to the numbers he recently crunched, Citibank alone should be on the hook for $23.9 billion in damages over the class period, from August 2007 to May 2010.

“It bugs me that people are, I think, being taken advantage of in these settlements. I don't think a penny on the dollar or a half a penny on the dollar is fair,” Jacobowitz said.

Yet until he got involved, being able to show that these settlements were, in fact, pennies on the dollar was all but impossible. The problem, which he raised at a fairness hearing last October in the Barclays' settlement, was that no one seemed to be able to answer what the damages caused by the banks' LIBOR manipulation really were.

At the hearing before U.S. District Judge Naomi Reice Buchwald of the Southern District of New York, Jacobowitz, then representing a different plaintiff at the time, stated that he appreciated the hard work that had gone into reaching the settlement over the preceding few years, and that settling, ultimately, was the right move, according to transcripts. But he was concerned that no one, including Buchwald, was able to provide a clear answer on what connection the settlement figure had to the calculated damages. Following up with class counsel later, the answer became clear: there was none.

“You would think there'd be some report that calculates damages, but lo and behold, no,” Jacobowitz said.

He decided to try and rectify that. Doing so wasn't easy. The banks weren't providing much information. What he could glean from plaintiffs' counsel he did, including a critical chart that showed the rates of suppression of LIBOR by the banks. He then turned to information available from regulators and bank oversight groups such as the U.S. Office of the Comptroller of the Currency and the Bank for International Settlements.

Jacobowitz used information about the specific interest contracts over the time period, as well as data showing U.S. dollar swaps worldwide, to try and pinpoint Citi's position in the overall market. He used the most common tenor for swaps—one-month and three-month time periods—as the basis for applying the rates at which banks suppressed the benchmark interest rate. All this led to a figure of $24 billion in damages.

The response to Jacobowitz's calculations from the class counsel, whose clients would theoretically be reaping whatever benefits of a larger settlement figure, was less than enthusiastic. In papers filed earlier this month to Jacobowitz's Jan. 2 objection brief, attorneys for the co-lead counsel in the case, Hausfeld LLP and Susman Godfrey, discounted his findings as “back of the envelope analysis” and urged Buchwald to approve the settlement.

“The settlement is plainly fair, reasonable, and adequate. Indeed, given the risks of ongoing litigation and other factors addressed in OTC Plaintiffs' prior submissions, the settlement represents a truly excellent result for the OTC class and was only achieved after years of hard-fought litigation,” the reply signed jointly by Michael Hausfeld and Susman Godfrey partner William Carmody stated.

Jacobowitz acknowledges that his calculations are rough ones, he said they were front, not back, of the envelope, using the best information he had at his disposal—and done, at every turn, with estimates favorable to the banks. To the concerns raised by class counsel—he excluded from the analysis “transactions that are not serving as a basis for damages sought”—Jacobowitz said that, while there are different avenues available to calculate damages, all this guesstimation could be resolved easily.

“The banks could calculate this in two minutes. They have all the information necessary. … They know how many swaps they entered into, in which direction, and with whom, what the pricing was, what the timing was—they know everything,” he said.

On Tuesday, Jacobowitz will get another chance to convince Buchwald that, while these $100 million-plus settlements are a lot of money, the banks should be on the hook for substantially more. While it's impossible to know where she is ahead of the hearing, one detail in the litigation seems of interest on this point: so far, the judge has not signed off on the proposed settlement for Barclays.