Barclays PLC has agreed to pay approximately $20 million to settle a class action lawsuit alleging that the bank manipulated LIBOR, the London Interbank Offered Rate. LIBOR is one of the most commonly used interest rate benchmarks. Millions of home mortgages are based on LIBOR and billions of dollars of futures and options contracts based on LIBOR are traded every day. As such, millions of homeowners and numerous futures contracts and options contract investors and traders were affected by the rigging of LIBOR. The scale of the LIBOR manipulation is almost beyond comprehension.

Many of the world’s largest banks have been named as defendants in various class action lawsuits accusing the banks of taking part in the widespread LIBOR manipulation. Barclays is the first of the banks to agree to settle. Barclays and various other banks already collectively have paid billions of dollars to settle regulatory charges relating to the manipulation of LIBOR and we expect that hundreds of millions or billions of additional dollars will be paid to settle the class action lawsuits.

In cases such as this where multiple defendants have been accused of working together to manipulate a market, the first defendant to settle also often agrees to cooperate with the plaintiffs. Such cooperation often strengthens the plaintiff’s case against the other defendants. This case is no exception, where Barclays has agreed to cooperate.

Dimond Kaplan & Rothstein represents one of the many plaintiffs involved in this massive multi-district litigation matter. We are hopeful that justice will prevail and that the banks either will agree to own up to their wrongdoing and pay settlements or that the court will rule that the banks are liable.

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