Big banks win dismissal of Libor-rigging litigation in New York

By Jonathan Stempel

NEW YORK, Sept 25 (Reuters) - A federal judge on Thursday dismissed "all remaining claims" in a slew of antitrust litigation accusing large banks of conspiring to rig Libor, an interest rate benchmark that once underpinned hundreds of trillions of dollars of transactions, at investors' expense.

In a 273-page decision, U.S. District Judge Naomi Reice Buchwald said that despite 14 years of litigation, investors lacked sufficient evidence to prove they were defrauded in a "multi-year, sixteen-bank conspiracy" to suppress Libor and conceal that suppression.

"The evidence they cite does not tend to exclude the possibility that the alleged conspirators acted independently," Buchwald wrote.

Banks still involved in the cases included Bank of America (BAC) , Barclays (BCS), Deutsche Bank, HSBC (HSBC) , JPMorgan Chase (JPM), Lloyds, NatWest (NWG) , Portigon, Rabobank, Royal Bank of Canada (RY) and UBS.

According to the plaintiffs, emails, chatroom discussions, phone calls, deposition testimony and expert analysis showed the banks kept Libor "artificially low."

This allegedly inflated earnings and made the banks appear healthier than they were, including during the 2008 global financial crisis, the plaintiffs said.

The plaintiffs included Principal Financial Group (PFG), the cities of Baltimore and Houston, many California counties, Yale University, Fannie Mae, Freddie Mac, and the FDIC in its role as a receiver for failed banks, among others.

Lawyers for the plaintiffs did not immediately respond to requests for comment.

Bank of America (BAC), the first named defendant in most lawsuits covered by Buchwald's decision, declined to comment.

Banks used Libor, or the London Interbank Offered Rate, to set interest rates on more than $300 trillion of financial products including credit cards, student loans and mortgages, and determine the cost of borrowing from each other.

Libor was phased out in January 2022, after banks paid about $9 billion of fines to settle Libor-rigging probes worldwide.

The case is In re Libor-Based Financial Instruments Antitrust Litigation, U.S. District Court, Southern District of New York, No. 11-02262. (Reporting by Jonathan Stempel in New York; Editing by Lincoln Feast)