Banks pay $182.5m to settle rate lawsuit

CITIGROUP INC and JPMorgan Chase & Co will pay $182.5m to settle US investor litigation claiming they violated antitrust law by conspiring with other banks to rig a key European interest rate benchmark.

A preliminary settlement addressing the banks’ alleged manipulation of the European Interbank Offered Rate, or Euribor, was filed with the US District Court in Manhattan, and requires a judge’s approval.

Five banks have reached $491.5m of settlements in the case, including earlier settlements of $170m by Deutsche Bank AG, $94m by Barclays Plc and $45m by HSBC Holdings Plc.

Euribor is the euro-denominated equivalent of Libor, a benchmark for setting rates on hundreds of trillions of dollars of credit cards, student loans, mortgages and other debt.

Investors including the California State Teachers’ Retirement System pension fund accused banks of rigging Euribor and fixing prices of Euribor-based derivatives from June 2005 to March 2011 to profit at their expense.

According to the settlement agreement, Citigroup and JPMorgan denied wrongdoing, and settled to avoid the cost and distraction of litigation. Several banks remain defendants.

Citigroup spokeswoman Danielle Romero-Apsilos and JPMorgan spokeswoman Tasha Pelio declined to comment on Friday.