Libor-rigging banks face rash of lawsuits
British lawyer David Doble held a conference at a Frankfurt hotel this month to tell an audience of German Landesbank executives they had good reason to seek punishment for those who rigged interest rates.
It was an about-face for Doble to be touring Europe talking to investors about how to recoup losses from lenders. He used to work for big banks drafting securitization deals, so he’s more familiar than most with esoteric financial products and what happens when they go wrong.
While U.S homeowners, a futures trader and the City of Baltimore have sued banks claiming they were harmed by the manipulation of the London interbank offered rate and other benchmark rates, potential victims in Europe have been slower to come forward. Guardian Care Homes Ltd., one of the few companies to file a Libor-related lawsuit in the U.K., started laying out its case at a London court hearing today.
“Individuals within the banks that were manipulating Libor were doing so in contemplation of making gains for themselves and their trading desks,” Doble said at the event. “If they were making gains, then somebody out there was suffering losses.”
Regulators across the globe are investigating claims banks altered submissions that were used to set Libor in an effort to benefit traders, or to appear financially healthier than they were. Barclays Plc (BARC) paid a 290 million-pound ($465.5 million) fine in June to settle with regulators over rate rigging.