2nd Circuit Revives Claims Against Banks Over Alleged Interest-Rate Manipulation
The ruling, from U.S. Court of Appeals for the Second Circuit Judge Michael Park, revived a lawsuit against Citibank, HSBC Holdings, Merrill Lynch International and other banks accused of rigging the yen LIBOR and Euroyen TIBOR, which reflect the cost of borrowing Japanese yen.
April 01, 2020 at 06:42 PM
3 minute read
A proposed class of investors has standing to sue some of the world's largest financial institutions over their alleged manipulation of benchmark interest rates used to price financial derivatives in the yen currency market, a Manhattan-based appeals court said on Wednesday.
The ruling, from a three-judge panel of the U.S. Court of Appeals for the Second Circuit, revived a lawsuit against Citibank, HSBC Holdings, Merrill Lynch International and other banks accused of rigging the yen LIBOR and Euroyen TIBOR, which reflect the cost of borrowing Japanese yen.
A Manhattan federal judge had dismissed the case in 2017, finding that the complaint had failed to establish Article III standing. The Second Circuit, however, ruled on Wednesday that the plaintiffs, a group of investment funds, had adequately alleged economic injury as a result of the bank's alleged market manipulation.
"Plaintiffs have plausibly pled that they suffered 'monetary loss' in these transactions as a result of Defendants' alleged manipulation of interest rates, and this is sufficient injury in fact for Article III standing," U.S. Circuit Judge Michael Park wrote on behalf of the panel.
He was joined in the decision by Judges Rosemary Pooler and Gerard Lynch.
The 381-page complaint, filed in July 2015, alleged violations of the Sherman Act and the Racketeer Influenced and Corrupt Organizations Act, stemming from a supposed conspiracy among the banks to fix the price of financial derivatives between 2006 and 2011.
The banks argued that the case was simply an attempt to "circumvent" a ruling by the U.S. District Court for the Southern District of New York, which dismissed similar claims of an alleged conspiracy in 2012. The plaintiffs, defense counsel said, also lacked standing to bring the suit because none of the plaintiffs had traded the actual derivatives at issue.
The appeals court, however, said the complaint had identified "numerous instances" where the funds had entered derivative transactions at prices resulting from the bank's alleged price-fixing, and said the lawsuit established a link between the yen LIBOR rate and yen foreign exchange forwards, as well as two other types of derivatives.
"The complaint adequately alleges that Yen LIBOR is routinely used to price Yen FX forwards, and Plaintiffs provide detailed supporting allegations, including an explanation of the role Yen LIBOR plays in the generic pricing formula. No more is required at this stage," Park said.
Attorneys for both sides were not immediately available to comment on the ruling.
The plaintiffs are represented by Eric Citron of Goldstein & Russell in Baltimore; Vincent Briganti, Geoffrey Horn, Peter St. Phillip Jr., Lee Lefkowitz and Christian Levis of Lowey Dannenberg in White Plains; and Joseph Tobacco Jr. of Berman Tobacco in San Francisco.
The banks are represented by David Lesser and Jamie Dycus of Wilmer Cutler Pickering Hale and Dorr in New York and Ari Savitzky, from the firm's Washington, D.C., office.
The case is captioned Sonterra Capital Master Fund v. UBS.
Read More:
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllTrump, ABC News Settlement in Defamation Lawsuit Includes $1M in Attorney Fees For President-Elect
Can Law Firms Avoid Landing on 'Enemy' List During the Trump Administration?
5 minute readDeluge of Trump-Leery Government Lawyers Join Job Market, Setting Up Free-for-All for Law Firm, In-House Openings
4 minute readLaw Firms Mentioned
Trending Stories
- 1Will Khan Resign? FTC Chair Isn't Saying Whether She'll Stick Around After Giving Up Gavel
- 2Wrongful-Death Case Against Adult Day Care Sparks Call for State Regulation
- 3Attorney Claims He Was Denied Firearm Carry Permit Because of His Views on Middle East Conflict
- 4Judges’ ‘Unretirements’ After Trump's Win Spark Dubious Ethics Complaints
- 5High Court Revives Kleinbard's Bid to Collect $70K in Legal Fees From Lancaster DA
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250