UBS Securities Japan Co. Ltd Sentenced for Manipulation of LIBOR

The investment bank, financial advisory securities firm and wholly-owned subsidiary of UBS AG known as UBS Securities Japan Co. Ltd. (UBS Securities Japan) was sentenced  by U.S. District Judge Robert N. Chatigny in the District of Connecticut on September 18, 2013 for its role in manipulating the London Interbank Offered Rate (LIBOR).

Please see the U.S. Department of Justice press release of September18, 2013 here.

Please see also a number of the document filings from the case, including the Information, Waiver of Indictment, Plea Agreement and Sentencing Memorandum.

County of Sacramento LIBOR Lawsuit

Sacramento County, California sued 22 global banks in the U.S. District Court for the Eastern District of California on July 23, 2013.

The County alleges that the banks engaged in a scheme to manipulate the London Interbank Offered Rate (LIBOR) in violation of state and federal antitrust and common laws (California’s Cartwright Act, Cal. Bus. and Prof. Code §§ 16700-16770 and the federal Sherman Act,  15 U.S.C. §§ 1–7).

The case is:

County of Sacramento v. Bank of America Corp., et al. (No. 13-1476, E.D. Calif.).

The complaint is here.

The County contends that the defendants’ actions deprived it “of the rate of interest that Plaintiff should have received from its investments or financial instruments.”

And:

“From at least as early as August of 2007, the Defendant banks conspired to, and did, manipulate LIBOR by misreporting to the British Bankers’ Association the accurate interest rate at which each expected they could borrow funds from the other LIBOR member banks. In the case of artificially suppressing LIBOR, Defendants were able to significantly reduce, for example, the amount that should be paid to counterparties, including Plaintiff.”

The County has also asserted additional claims for fraud and deceit, negligent misrepresentation, interference with economic advantage, breach of the implied covenant of good faith and fair dealing and unjust enrichment.

The County is represented by Joseph W. Cotchett, Nanci E. Nishimura, Frank C. Damrell Jr. and Aron K. Liang of Cotchett, Pitre & McCarthy in Burlingame, California, and John F. Whisenhunt and Krista C. Whitman of the County of Sacramento, Office of County Counsel, in Sacramento.

*The case has been added to the multidistrict litigation — docket number 11-2262 — in the U.S. District Court for the Southern District of New York — please see here — and see here for a recent (August 23, 2013) ruling (denying motions by over-the-counter (OTC), bondholder and exchange-based plaintiffs for leave to amend their amended complaints to add allegations of antitrust injury related to their claims) by the judge ( Naomi Reice Buchwald) in that multidistrict matter*

Asset Management and Insurance Company “Principal Financial Group Inc.” Files LIBOR Lawsuit

The large asset management and insurance company Principal Financial Group Inc. has just filed a lawsuit alleging manipulation/conspiracy to depress the London Interbank Offered Rate (LIBOR) during the period August 2007 to May 2010.

The case is Principal Financial Group Inc. v. Bank of America Corp. et al. (S.D. Iowa No. 13-00335).

The complaint is here.

San Diego Association of Governments & University of California Sue Banks for LIBOR Manipulation

The lawsuits filed in U.S. District Courts for the Northern and Southern Districts of California allege the banks engaged in a global conspiracy to manipulate LIBOR in violation of the federal Sherman and Clayton antitrust acts, 15 U.S.C. 1 et seq., as well as in violation of California antitrust laws, in particular the Cartwright Act, Cal. Bus. & Prof. Code 16720 et seq.

The cases are:

Some LIBOR-Related Government Investigations

1) Commodity Futures Trading Commission (CFTC) – CFTC Orders Barclays to pay $200 Million Penalty for Attempted Manipulation of and False Reporting concerning LIBOR and Euribor Benchmark Interest Rates – Release: PR6289-12 (June 27, 2012)    

2) Department of Justice (DoJ – U.S.) – Barclays Bank PLC Admits Misconduct Related to Submissions for the London Interbank Offered Rate and the Euro Interbank Offered Rate and Agrees to Pay $160 Million Penalty (June 27, 2012) 

See also: the Barclays Bank PLC June 26, 2012 Non-Prosecution Agreement.

And see the Barclays Bank PLC June 26, 2012 Non-Prosecution Agreement here.

3) RBS Securities Japan Limited Agrees to Plead Guilty in Connection with Long-Running Manipulation of Libor Benchmark Interest Rates: Second Financial Institution to Plead Guilty to Libor Fraud and Pay Substantial Criminal Penalties; RBS Parent Company Also Admits Fault in Deferred Prosecution Agreement (February 6, 2013)

See also: CFTC Orders The Royal Bank of Scotland plc and RBS Securities Japan Limited to Pay $325 Million Penalty to Settle Charges of Manipulation, Attempted Manipulation, and False Reporting of Yen and Swiss Franc LIBOR (Release: PR6510-3) (February 6, 2013)

And see: RBS fined £87.5 million for significant failings in relation to LIBOR (FSA/PN/011/2013) (February 6, 2013)

4) Financial Services Authority (FSA – U.K.) – Final Notice (June 27, 2012) (Barclays fined £59.5  million for acting “inappropriately and breached Principle 5 on numerous occasions between January 2005 and July 2008 by making US dollar LIBOR and EURIBOR submissions which took into account requests made by its interest rate derivatives traders”)

SEE ALSO: FSA finalises proposals for the regulation and supervision of benchmarks
FSA/PN/029/2013
25 Mar 2013

The Financial Services Authority (FSA) has finalised new rules and regulations for financial benchmarks. This follows the recommendations of the Wheatley Review of the London Inter-Bank Offered Rate (LIBOR).

5) H.M. Treasury (HMT – U.K.) – [DRAFT] The Wheatley Review of LIBOR (August 2012)

See also Association of Corporate Treasurers (ACT – U.K.): The Wheatley Review of LIBOR – ACT response (September 5, 2012)

[FINAL] The Wheatley Review of LIBOR (September 2012)

6) Independent Commission on Banking (ICB – U.K.) – Final Report (September 2011)

See also Opening Remarks by Sir John Vickers (September 12, 2010)

7) House of Lords & House of Commons “Changing banking for good: Report of the Parliamentary Commission on Banking Standards (U.K.) (June 19, 2013) – see:

New, New York State LIBOR-Related Lawsuit Filed by Quinn Emanuel Urquhart & Sullivan, LLP for Salix Capital Based on Securities and Common-Law Fraud Claims (Not Antitrust Violations)

The case is titled Salix Capital US Inc. and Salix Capital Ltd. v. Bank of America Securities LLC et al. [Supreme Court of the State of New York, County of New York, Index Number 651823-2013] and was filed principally by Quinn Emanuel Urquhart & Sullivan, LLP’s New York office.

The 106-page complaint is here.

For some news coverage/commentary, please see here and here.

LIBOR-Based Financial Instruments Antitrust Litigation (S.D.N.Y. 11-2262): Court’s Memorandum & Order of March 29, 2013 … and related …

The memorandum and order of Judge Naomi Reice Buchwald in the LIBOR-Based Financial Instruments Antitrust Litigation (S.D.N.Y. 11-2262), dated March 29, 2013 — granting the bank defendants’ motion to dismiss the plaintiffs’ federal antitrust claims and partially dismissed the plaintiffs’ claims of commodities manipulation as well as racketeering and state-law claims —  here.

From some exasperated commentary on Judge Buchwald’s memorandum and order, see:

No Civil Recovery for Antitrust Violations in LIBOR Collusion Case

And see here for the May 3, 2013 order of the court — as well as commentary thereon — which, among other things, grants the plaintiffs’ request for leave to file a motion to amend their amended complaints.

Plus see here as to the “long road ahead” for the LIBOR-Based Financial Instruments Antitrust Litigation.

Barclays LIBOR-related lawsuit (Gusinksy v. Barclays Plc, S.D.N.Y. 12-05329) dismissed

The case is Gusinsky et al v. Barclays Plc et al, U.S. District Court, Southern District of New York, No. 12-05329.

Judge Shira A. Scheindlin’s May 13, 2013 opinion dismissing the lawsuit is here.

Charles Schwab Corp. Files California Superior Court (City & County of San Francisco) LIBOR Action

The complaint — filed 29 April 2013 (case no. CGC-13-531016) by Lieff, Cabraser, Heimann & Bernstein on behalf of the Charles Schwab Corporation and affiliated entities — is here.

For commentary, please see:

Libor litigation lives! Schwab refiles fraud claims in state court

&

Libor-Scandal Litigation: After Federal Court Dismissal, Schwab Pursues State Court Suit.

Salz Review of Barclays’ Business Practices

The Salz Review of Barclays’ Business Practices was released in final form today — please see here.

For the 3-page “terms of reference” of the review — led by Anthony Salz, a corporate lawyer and investment banker, per commission by Barclays PLC — please see here.

The full, 244-page report — “Salz Review: An Independent Review of Barclays’ Business Practices” — is here.

(The original, July 24, 2012 press release announcing establishment of the Salz Review is here.)