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*

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:

• San Diego Association of Governments v. Bank of America Corp., S.D. Cal., No. 3:13-cv-01466, filed June 25, 2013.
• Regents of the University of California v. Bank of America Corp., N.D. Cal., No. 4:13-cv-02921, filed June 25, 2013.

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:

• “Volume I: Summary, and Conclusions and recommendations”
• “Volume II: Chapters 1 to 11 and Annexes, together with formal minutes”