|  | | 2012 News and Press Releases | | |
HEADLINE NEWS:
New York Bank Sues Libor-Setting Banks For Fraud
Kevin LaCroix
The D & O Diary. July 31, 2012
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EXCERPT: In the latest lawsuit to arise from the rapidly evolving Libor scandal, a New York bank has filed a purported class action in the Southern District of New York, seeking to recover damages from the U.S. Dollar Libor rate setting banks for fraud. […] The plaintiff in this latest suit is Berkshire Bank […]. The bank’s complaint purports to be filed on behalf of a class of “all banks, savings & loan institutions, and credit unions headquartered in the State of New York, or with the majority of their operations in the State of New York, that originated loans, purchased whole loans, or purchased interests in loans with interest rated tied to Libor, which rates adjusted at any time between August 1, 2007 and May 31, 2010.” The defendants in the lawsuit include the 16 banks on the panel that set the U.S. dollar London interbank offered rate (Libor) between August 2007 and May 2012. (There are actually 21 named defendants, as multiple related corporate entities have been named as defendants for certain of the Libor setting banks.) The complaint alleges that the plaintiff banks “suffered damages as a result of Defendants’ fraudulent conduct in artificially decreasing the USD LIBOR rate during the Class Period, causing them to receive lower interest than they would have been entitled but for the Defendants’ fraud.” The specific harm the plaintiff alleges is that the reduction of Libor brought about by the defendants’ alleged manipulation of Libor reduced the amount of interest the plaintiff banks could earn on their outstanding loans. The complaint asserts substantive claims for fraud and for unjust enrichment/disgorgement.
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