Seven of the world's largest banks settle US rate rigging lawsuit
Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, JP Morgan and Royal Bank of Scotland have all agreed to pay $324m to settle a private US lawsuit claiming the lenders rigged an interest rate benchmark used in the $553tn derivatives market. Allegations include the execution of rapid trades just prior to the rate being set each day, called "banging the close," causing ICAP to delay trades until they moved ISDAfix where they wanted, and posting rates that did not reflect market activity. The remaining defendants in the case, BNP Paribas, Goldman Sachs, HSBC, Morgan Stanley, Nomura, UBS, Wells Fargo and ICAP declined to comment on the latest settlement.
The banks were accused of colluding from 2009 to 2012, covering the period when anti-capitalist Occupy demonstrators held protests around the world. REUTERS/Pawel Kopczynski

NEW YORK (Reuters) - Seven of the world's biggest banks have agreed to pay $324 million (£222.7 million) to settle a private US lawsuit accusing them of rigging an interest rate benchmark used in the $553 trillion (£380.2 trillion) derivatives market.

The settlement made public on Tuesday resolves antitrust and other claims against Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, JPMorgan Chase & Co and Royal Bank of Scotland Group.

Several pension funds and municipalities accused the banks of engaging in a conspiracy to rig the "ISDAfix" benchmark from 2009 to 2012.

The ISDAfix is used a benchmark to set the price of swaps and interest rate derivatives.

Bloomberg reports that the fine follows a ruling by US District Judge Jesse Furman in Manhattan that a group of investors led by an Alaska pension fund had raised “plausible allegations that a conspiracy among the defendants existed” and allowed the suit to go forward.

The pension funds and municipalities claim that from 2009 onwards the banks electronic chatrooms to fix the IDSAfix, typically submitting the same prices when it came time to fix the price.

Other bank defendants have yet to settle. HSBC, Morgan Stanley, BNP Paribas, Goldman Sachs, Nomura, UBS, Wells Fargo, and ICAP are still involved in the case, according to Bloomberg.

(Reuters reporting by Jonathan Stempel in New York; Editing by David Gregorio)