Libor Litigation Overview: Securities,
Antitrust and Regulatory Implications
© 2012 Labaton Sucharow LLP. All rights reserved.
April 8, 2015
Disclaimer: This Presentation is Strictly For Educational Purposes Only and Does Not
Offer Legal Advice Nor Create An Attorney-Client Relationship.
Labaton Sucharow LLP
Thomas A. Dubbs
Thomas A. Dubbs
Partner
– Retained by various State Funds, including Ohio (AIG), New Jersey
(STEC), Michigan (Bear Stearns), CALPERS (QWEST), State of
New Mexico Funds (WellCare, HealthSouth as well as hedge funds
and banks
– Former Senior Vide President and Senior Litigation Counsel for
Kidder, Peabody & Co. Incorporated
© 2012 Labaton Sucharow LLP. All rights reserved.
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William P. Butterfield
Hausfeld LLP
William P. Butterfield
Partner
– William P. Butterfield is a Partner at Hausfeld LLP in Washington
D.C., where he chairs the Firm’s Financial Services Practice Group.
He has represented governmental agencies, corporations, directors
and officers, and investors in private litigation over securities,
commodities, antitrust, and consumer claims, and in investigations
commenced by the Securities and Exchange Commission.
© 2012 Labaton Sucharow LLP. All rights reserved.
3
Morvillo, Abramovitz, Grand Iason, Anello & Bohrer PC
Elkan Abramowitz
Elkan Abramowitz
Partner
– Elkan Abramowitz is a Partner at Morvillo, Abramowitz, Grand,
Iason, Anello & Bohrer PC in New York City. He is a leading white
collar criminal defense lawyer with long experience in handling civil
and criminal matters in state and federal court for individual and
corporate clients.
© 2012 Labaton Sucharow LLP. All rights reserved.
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Overview of the Libor Scandal
 Libor Scandal: An Overview of Libor
 Banks now use Libor to set the prices on derivatives—
financial instruments tied to commodities, interest
rates, currencies, and other assets.
 Libor is also considered a crucial indicator of the
creditworthiness and liquidity of the banks that supply
the information used to set Libor.
© 2012 Labaton Sucharow LLP. All rights reserved.
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Overview of the Libor Scandal
 Libor Scandal: A Chronology
 In November 2007, bankers and other market participants began expressing
concern to the British Bankers Association about whether Libor-setting banks were
reporting rates that reflect their true borrowing costs.
 In May 2008, the Wall Street Journal published an analysis with findings that a
number of banks submitted significantly lower borrowing costs for Libor than what
other market measures, such as credit-default insurance.
 In March 2011, reports began to circulate that the U.S. Department of Justice,
Securities and Exchange Commission, and the Commodity Futures Trading
Commission had launched investigations in the Libor-setting banks for
manipulating Libor.
© 2012 Labaton Sucharow LLP. All rights reserved.
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Overview of the Libor Scandal
 Libor Scandal: A Chronology and the Barclays
Scandal
– Regulators concentrated their probes on two types of Libor
manipulation that took place just before and during the global
financial crisis:
• (1) false data submitted by bank to push Libor in a direction that would
benefit their own traders; and
• (2) the intentional lowering of daily Libor rates by banks to make their
institutions’ financial positions look better than they actually were.
© 2012 Labaton Sucharow LLP. All rights reserved.
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Overview of the Libor Scandal
 Libor Scandal: A Chronology and the Barclays
Scandal
– On June 27, 2012, Barclays PLC agreed to pay a $453 million fine
to settle accusations by the U.S. Commodity Futures Trading
Commission and Department of Justice and the U.K. Financial
Services Authority that it had colluded with other banks to
artificially depress Libor. As part of the settlement, Barclays
admitted to manipulating Libor beginning at least as early as 2005
and through 2009, in an effort to artificially bolster the Company’s
apparent liquidity, and to benefit the Company’s interest-rate
derivatives positions.
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The Libor Scandal -Antitrust
 William Butterfield
 Beginning August 2011, many of the cases advancing claims
relating to manipulation of Libor—including the cases that do not
advance antitrust claims—were consolidated into a single
multidistrict litigation matter before Judge Naomi Reice Buchwald
of the U.S. District Court for the Southern District of New York,
under the caption In re LIBOR-Based Financial Instruments
Antitrust Litigation, MDL No. 2262 (S.D.N.Y.).
© 2012 Labaton Sucharow LLP. All rights reserved.
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The Libor Scandal
 Elkan Abramowitz
 What we know and do not know about current state of LIBOR
investigations
 “Do’s and Don’ts” of Investigations
© 2012 Labaton Sucharow LLP. All rights reserved.
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Thomas Dubbs
Individual and Class Suits
In re Libor-Based Financial Instruments Antitrust Litigation,
No. 11-MD-2262 (S.D.N.Y.)
Class Suits in Consolidated Action:
Claims of Over-the-Counter Plaintiffs:
Sherman Act § 1; Clayton Act § 4; unjust enrichment & restitution
Claims of Exchange-Based Plaintiffs:
Commodity Exchange Act § 1 et seq.; Commodity Exchange Act
(vicarious liability); Commodity Exchange Act § 22 (aiding and abetting);
Sherman Act § 1; restitution/ disgorgement/unjust enrichment
© 2012 Labaton Sucharow LLP. All rights reserved.
Thomas Dubbs
Individual and Class Suits
Claims of Bondholder Plaintiffs:
Sherman Act § 1, Clayton Act § 4
Individual Suits in Consolidated Action:
3 Suits by Charles Schwab Entities:
Sherman Act § 1; RICO; Cartwright Act, Cal. Bus. & Prof. Code §§ 16720
et seq.; interference with economic advantage (Cal. law); breach of implied
covenant of good faith (Cal. law); unjust enrichment (Cal. law)
© 2012 Labaton Sucharow LLP. All rights reserved.
The Libor Scandal - Securities Class Action – Barclays ADRs
• Securities Class Action – Barclays ADRs[1]
• 3.6 percent of Barclays equity is traded via sponsored ADRs in the
United States.
• When Barclays’ settlements were disclosed to the public on June 27,
2012, the Company’s ADR price fell from $12.33 per share to $10.84
per share, or 12.08 percent.
• Class Period: July 10, 2007 and June 27, 2012.
• Barclays’ share price during the class period of the ADR Action.
• Allegations: Violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and SEC Rule 10b-5, claiming that Barclays
made false and misleading statements.
• Lead Plaintiff Deadline: September 10, 2012.
[1] See Gusinsky v. Barclays PLC, No. 12-cv-5329 (S.D.N.Y. July
10, 2012).
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Overview of the Libor Scandal – General Considerations
– International Aspects
• Government Cases are Ongoing and Regulatory Investigations
are taking place worldwide
– Canada
– Japan
– Singapore
 How do you look at your exposures?
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