“From Collusion to Competition” – Ninth Issue

May 30, 2013

CPI Cartel Column edited by Rosa Abrantes-Metz (NYU Stern School of Business)

Introduction by Rosa Abrantes-Metz

Welcome to the May issue of “From Collusion to Competition.” This month we will be reading about one of the most topical cartel matters of the recent times: LIBOR!

The manipulation and conspiracy of LIBOR is a most fascinating matter: first flagged by screens used by the Wall Street Journal and my own work with co-authors in 2008, and followed years later by other studies, in March 2011 we learned that UBS was being investigated. Soon after in the Spring of 2011 a leniency application was filed with the Department of Justice, and since then, admissions of attempted manipulation and collusion were made, jail time is already being served by some participants, settlement agreements have been reached (with more to come), investigations have been initiated in similar rates such as Euribor and TIBOR, as well as in other markets (swaps), some banks’ management have resigned, an impressive effort was initiated and led by the CFTC and FSA through IOSCO to reform financial benchmarks across the world, and of course, a significant amount of private litigation is underway.

The two excellent articles starred today provide comments on the recent decision by Judge Naomi Reice Buchwald of the Southern District of New York, on the consolidated class actions brought by a diverse group of investors against LIBOR panel contributing banks, in which allegations of antitrust violations were dismissed.

The first article by Peter D. St. Phillip, Jr. and Raymond Girnys, respectively Shareholder and Associate at Lowey Dannenberg Cohen & Hart, P.C., is titled “No Antitrust Injury In Libor Rate-Setting?—What Happened To Effects?”

No Antitrust Injury In Libor Rate-Setting?—What Happened To Effects? – Peter D. St. Phillip, Jr. and Raymond Girnys (Lowey Dannenberg Cohen & Hart, P.C.)

The second article, “A License to Collude,” is authored by Sandeep Vaheesan, Special Counsel at the American Antitrust Institute. Both articles put forward reasons why such antitrust claims should not have been dismissed.

A License to Collude – Sandeep Vaheesan (Special Counsel, American Antitrust Institute)

I hope you enjoy the reading as much as I have, this is certainly an engaging topic from a law and economics standpoint. We welcome your comments below.

Rosa M. Abrantes-Metz