Cit­i­group, JPMor­gan to pay $182.5 mil­lion to set­tle rate-rig­ging law­suit

Business a.m. - - WORLD BUSINESS & ECONOMY -

CIT­I­GROUP INC AND JPMOR GAN Chase & Co will pay $182.5 mil­lion to set­tle U.S. 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 on Wed­nes­day night with the U.S. District Court in Man­hat­tan, and re­quires a judge’s ap­proval.

Reuters re­ports that five banks have reached $491.5 mil­lion of set­tle­ments in the case, in­clud­ing ear­lier set­tle­ments of $170 mil­lion by Deutsche Bank AG, $94 mil­lion by Bar­clays Plc and $45 mil­lion by HSBC Hold­ings Plc.

Euri­bor is the euro-de­nom­i­nated equiv­a­lent of Libanks

bor, 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 (CalSTRS) pen­sion fund ac­cused

of rig­ging Euri­bor and fix­ing prices of Euri­bor­based 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. Vin­cent Bri­g­anti, a lawyer for the plain­tiffs, also de­clined to com­ment.

Many law­suits in the Man­hat­tan court seek to hold banks li­able for al­leged rig­ging in in­ter­est rate, com­mod­ity, cur­rency and other fi­nan­cial mar­kets.

JPMor­gan this week reached a sep­a­rate $7 mil­lion set­tle­ment of in­vestor claims that it con­spired with ri­vals to rig the Aus­tralian Bank Bill Swap Ref­er­ence Rate, be­com­ing the first bank to set­tle that lit­i­ga­tion. The same law firms rep­re­sented in­vestors in that case and the Euri­bor case.

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