U.S. judge rules banks must face lawsuit over alleged rate rigging
By Dena Aubin
NEW YORK (Reuters) - A federal judge in Manhattan has ruled that a group of international banks must face complaints that they violated the U.S. Commodity Exchange Act by manipulating yen-denominated interest rate benchmarks between 2006 and 2010.
In a ruling on Friday, U.S. District Judge George Daniels also granted the banks' motion to dismiss related claims against them for antitrust violations and unjust enrichment.
The banks, which included Mizuho Bank Ltd, JP Morgan Chase & Co, Barclays Bank AG, UBS AG and Citigroup Inc, were sued in 2012 for allegedly manipulating rates that reflect interest on short-term loans denominated in Japanese yen.
The interest rate benchmarks, used for pricing a wide array of financial products, are set each day based on rates submitted by banks as the prevailing market rates or the rates at which they could borrow funds.
Lawyers for the banks could not immediately be reached for comment.
The class action was filed on behalf of Jeffrey Laydon, a Sanford, Florida man who said he suffered losses on futures contracts that were manipulated by the banks.
According to the lawsuit, the banks deliberately and systematically submitted false rates to the Japanese Bankers Association and British Bankers Association, which set the benchmark rates.
The rates involved were the Euroyen Tokyo Interbank Offered Rate (TIBOR), the London Interbank Offered Rate for Japanese Yen (Yen-LIBOR), and Euroyen TIBOR futures contracts. Continued...