Banks urge judge to throw out Libor lawsuits
By Bernard Vaughan
NEW YORK (Reuters) - Banks facing a barrage of lawsuits from customers accusing them of interest-rate rigging argued on Tuesday that the cases should be dismissed, saying there is no evidence of antitrust or other violations.
Plaintiffs including community banks and local governments have sued Bank of America (BAC.N: Quote), JPMorgan Chase & Co (JPM.N: Quote) and others for allegedly manipulating the London Interbank Offered Rate, commonly known as Libor.
Libor, which has been the focus of a global investigation by regulators, is used to set interest rates on more than $350 trillion of securities from mortgages to complex derivatives.
At a hearing before U.S. District Judge Naomi Reice Buchwald in Manhattan, lawyers for the banks urged that the cases be thrown out before trial. The cases include proposed class action lawsuits alleging violations of antitrust law and the Commodities Exchange Act, which regulates the trading of commodity futures in the United States.
The antitrust claims should be dismissed because there is no documented agreement among the banks to keep Libor low, argued Robert Wise, a lawyer for Bank of America.
Further, he told the judge, the banks did not restrain trade because Libor is an estimate they provide on their borrowing costs, not a price for a product they set in a competitive process.
"Libor is not something that is bought, or sold, or traded," said Wise, who also argued that the plaintiffs lacked standing to bring the lawsuits. "It is simply a benchmark, an average."
Judge Buchwald questioned the plaintiffs' attorneys on that argument, noting that even if banks suppressed Libor they still competed against each other for business once the rates were set. Continued...