Articles Tagged with Euribor

A preliminary $182M settlement has been reached in a benchmark rigging lawsuit between investors and banks Citigroup Inc. (C) and JPMorgan & Chase (JPM). Now, a federal judge must approve the deal, which would end claims accusing the two financial firms of manipulating the Euribor (Euro Interbank Offered Rate).

The benchmark interest rate is the average rate at which European banks are able to lend money to each other. It also is a key rate used for establishing certain loans.

It was just earlier this year that Euribor investors arrived at a $309M settlement over allegations that Barclays PLC (PLC), Deutsche Bank AG (DB), and HSBC Holdings Plc. (HSBC) had conspired to rig Euribor. Now, as part of this latest Euribor fraud settlement, JPMorgan and Citigroup have agreed to work with investors in their attempts to go after foreign defendant banks who were dropped from this lawsuit last year due to a lack of personal jurisdiction.

Deutsche Bank Settle Investor Lawsuit Over Euribor Rigging
Deutsche Bank AG (DB) has agreed to pay $170M to resolve an investor fraud lawsuit accusing the German lender of conspiring with other banks to rig Euribor and other derivatives. Euribor is the European Interbank Offered Rate benchmark and the euro-denomination equivalent of Libor, which is the London Interbank Offered Rate.

FrontPoint Australian Opportunities Trust and the California State Teachers Retirement System (CalSTRS) are two of the plaintiffs in the Euribor rigging case against Deutsche Bank. However, the bank, despite settling, is not denying or admitting to wrongdoing. It claims to have decided to resolve the case to avoid more lawsuits and further costs.

A preliminary settlement has been submitted in the U.S. District Court in Manhattan. Now, a judge must approve the deal.

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In London, six traders have pleaded not guilty to charges accusing them of trying to rig Euribor, which is the Brussels-based equivalent of the London Interbank Offered Rate (Libor). Euribor is key in establishing the rates on financial contracts, loans, and other financial products around the world.

The defendants include former Deutsche Bank (DB) trader Christian Bittar, current Deutsche trader Achim Kraemer, and former Barclays (BARC) traders Philippe Moryoussef, Colin Bermingham, Carlo Palombo, and Sisse Bohart. They are charged with one count of conspiracy to defraud through the making or obtaining of false or misleading Euribor rates in order allegedly enhance trading profits.

The criminal charges are related to a probe by the Serious Fraud Office. Five other traders from Deutsche Bank and Societe Generale were previously charged.

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Prosecutors in the United Kingdom have charged 10 former Barclays Plc (BARC) and Deutsche Bank AG (DEB) employees with rigging the Euribor benchmark. The ex-Deutsche Bank traders are Christian Bittar, Achim Kraemer, Joerg Vogt, Andreas Hauschild, Kai-Uwe Kappauf, and Ardalan Gharagozlou. The former Barclays traders are Philippe Moryoussef, Colin Bermingham, Sisse Bohart, and Carlo Palombo. An unidentified 11th trader is also expected to be charged.

Except for Bermingham, the rest of the defendants live outside Great Britain. These are the first charges in the Serious Fraud Office’s probe of Libor rigging involving the Euro interbank offered rate. More individuals are expected to be prosecuted.

Earlier this week, Bittar, who was once among Deutsche Bank’s most successful traders before he was let go in 2011, won a separate ruling. Although his name wasn’t mentioned in the Financial Conduct’s ruling in an interest rate benchmark’s manipulation probe into his former employer, Bittar contended that he was clearly identifiable in the details of the settlement. Bittar argued that because of this he was entitled to look at FCAs settlement with Deutsche Bank prior to its disclosure.

Global regulators had fined Deutsche Bank $2.5 billion earlier this year and the FCA published a document detailing the wrongdoing that included the term
“manager B” when referring to one of its managers. Bittar said that term clearly referred to him. A London judge said that Bittar was indeed improperly identified.

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