Libor Banks Ask U.S. Judge to Dismiss 17 Rate-Swap Suits

Banks including Bank of America Corp., Mitsubishi UFJ Financial Group Inc., Barclays Plc and Citigroup Inc., asked a judge to throw out claims they cheated customers on interest-rate swaps and other Libor-based transactions.

The companies asked U.S. District Judge Naomi Reice Buchwald in papers filed in Manhattan federal court yesterday and today to dismiss claims in 17 suits growing out of “over-the-counter” transactions, or deals in which investors engaged in Libor-based deals directly with one or more of the banks.

Buchwald is overseeing antitrust cases against the banks and the British Bankers’ Association over claims they illegally manipulated the London interbank offered rate.

The banks argued that the investors’ fraud claims are improper, that other claims are barred by previous court rulings and that the court lacks jurisdiction over some defendants.

In addition to the over-the-counter plaintiffs, the suits include claims by investors who bought financial products tied to Libor on an exchange, such as the Chicago Board of Trade or Chicago Mercantile Exchange. Plaintiffs in the exchange-based cases last month reached a $20 million settlement with Barclays in which the London-based bank agreed to cooperate with claims against other banks and potential defendants that haven’t yet been named.

The plaintiffs said the Barclays settlement is an “ice-breaker” intended to encourage other banks to settle. The settlement must be approved by Buchwald before it can take effect.

Global authorities have investigated claims that more than a dozen banks altered submissions used to set benchmarks such as Libor to profit from bets on interest-rate derivatives or make the lenders’ finances appear healthier.

The case is in re Libor-Based Financial Instruments Antitrust Litigation, 1:11-md-02262, U.S. District Court, Southern District of New York (Manhattan).

Before it's here, it's on the Bloomberg Terminal.