NEW YORK (Reuters) - Barclays Plc agreed to pay $120 million to settle private U.S. litigation accusing it of conspiring with rivals to rig the benchmark interest rate known as Libor, lawyers for the plaintiffs said on Friday.
The British bank is the first to resolve claims by so-called “over-the-counter” investors that transacted directly with banks comprising a panel to determine Libor, or the London Interbank Offered Rate.
Libor is used to set rates on hundreds of trillions of dollars of transactions, including for credit cards, student loans and mortgages. Banks use it determine the cost of borrowing from one another.
Sixteen banks were accused in the private litigation that began in 2011 of conspiring to manipulate the benchmark.
“This is a very good settlement for the class,” Hilary Scherrer, a partner at Hausfeld LLP representing the plaintiffs, said in an interview. “It is an icebreaker that could open up this litigation to future settlements.”
Barclays spokesman Mark Lane declined to comment.
The bank agreed last month to pay $94 million to settle separate litigation accusing it of conspiring to rig Euribor, which is Libor’s euro-denominated equivalent.
And in June 2012, Barclays admitted it manipulated Libor and Euribor as it reached $453 million of settlements with U.S. and British regulators. Several other banks, including Deutsche Bank AG and UBS AG have reached similar accords.
Friday’s settlement requires approval by U.S. District Judge Naomi Reice Buchwald in Manhattan.
In March 2013, she dismissed a “substantial portion” of the private Libor litigation, including federal antitrust claims.
But on August 4 of this year, she said plaintiffs could prevail on fraud claims if they proved that panel banks lied to the Libor administrator about their own borrowing costs, and that the plaintiffs relied on those lies.
Barclays will cooperate in Libor litigation against other banks, the Hausfeld firm said. Others suing over Libor include so-called bondholder plaintiffs and exchange-based plaintiffs, and the brokerage Charles Schwab Corp.
The case is In re: Libor-based Financial Instruments Antitrust Litigation, U.S. District Court, Southern District of New York, No. 11-md-02262.
Reporting by Jonathan Stempel in New York; editing by Chris Reese and David Gregorio