Top U.S. court restores alleged Libor manipulation lawsuit naming RBC - NEWS 95.7
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Top U.S. court restores alleged Libor manipulation lawsuit naming RBC

Last Updated Feb 23, 2018 at 6:20 pm ADT

In this July 14, 2010 photo, a Charles Schwab office is shown in Oakland, Calif. THE CANADIAN PRESS/AP-Paul Sakuma

NEW YORK, N.Y. – A U.S. appeals court has ruled in favour of Charles Schwab Corp. and several of its mutual funds, giving new life to their lawsuits alleging 16 financial institutions including Royal Bank of Canada conspired to manipulate the benchmark Libor interest rate.

The 2nd U.S. Circuit court of Appeals in Manhattan disagreed with portions of a lower court’s decision dismissing Schwab’s claims, and remanded the case for proceedings.

Circuit Judge Gerard Lynch says in the 64-page decision today that the district court was “wrong to assume, at the pleading stage, that Schwab was not harmed by, and may have even benefited from, Libor manipulation.”

Libor, or the London Interbank Loan Rate, is a set of benchmark interest rates, published daily, that approximate the average rate at which major banks can borrow money and is a reference point for interest rates for financial instruments globally.

Schwab, and several of its mutual funds, allege the 16 banks, including JP Morgan Chase and Citibank, artificially suppressed the Libor rate between August 2007 and May 2010.

They are seeking damages in connection with US$665 billion in transactions involving floating-rate and fixed-rate debt instruments.

“We will vigorously defend against this action,” said a Royal Bank spokesman.

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