US: Seven big banks settle rate-rigging lawsuit for $324 million

Seven of the world’s biggest banks have agreed to pay $324 million to settle a private US lawsuit accusing them of rigging an interest rate benchmark used in the $553 trillion derivatives market.

The settlement made public on Tuesday, which requires court approval, resolves antitrust claims against Bank of America , Barclays, Citigroup, Credit Suisse Group AG, Deutsche Bank, JPMorgan Chase. and Royal Bank of Scotland Group.

Several pension funds and municipalities accused 14 banks, including those that settled, of conspiring to rig the “ISDAfix” benchmark for their own gain from at least 2009 to 2012.

Companies and investors use ISDAfix to price swaps transactions, commercial real estate mortgages and structured debt securities.

The alleged illegal activity included the execution of rapid trades just before the rate was set each day, called “banging the close,” causing the British brokerage ICAP P.L.C. to delay trades until they moved ISDAfix where they wanted, and posting rates that did not reflect market activity.

Full Content: NBC News

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