In a ruling on Friday, U.S. District Judge George Daniels also
granted the banks' motion to dismiss related claims against them for
antitrust violations and unjust enrichment.
The banks, which included Mizuho Bank Ltd, JP Morgan Chase & Co,
Barclays Bank AG, UBS AG and Citigroup Inc, were sued in 2012 for
allegedly manipulating rates that reflect interest on short-term
loans denominated in Japanese yen.
The interest rate benchmarks, used for pricing a wide array of
financial products, are set each day based on rates submitted by
banks as the prevailing market rates or the rates at which they
could borrow funds.
Lawyers for the banks could not immediately be reached for comment.
The class action was filed on behalf of Jeffrey Laydon, a Sanford,
Florida man who said he suffered losses on futures contracts that
were manipulated by the banks.
According to the lawsuit, the banks deliberately and systematically
submitted false rates to the Japanese Bankers Association and
British Bankers Association, which set the benchmark rates.
The rates involved were the Euroyen Tokyo Interbank Offered Rate (TIBOR),
the London Interbank Offered Rate for Japanese Yen (Yen-LIBOR), and
Euroyen TIBOR futures contracts.
More than a dozen banks and brokerage firms have been investigated
worldwide over alleged manipulation of Libor and related benchmarks.
A Japanese investment banking unit of UBS in September was ordered
to pay a $100 million criminal fine after pleading guilty to wire
fraud for scheming to manipulate yen LIBOR to benefit a senior
[to top of second column]
Barclays and Royal Bank of Scotland Group Plc have also reached
settlements with authorities.
In his ruling, Daniels rejected the banks' argument that Laydon did
not have standing to sue under the Commodity Exchange Act. That act
gives plaintiffs standing to sue for manipulation of a futures
contract or the price of the commodity underlying the contract,
The Commodity Futures Trading Commission has repeatedly found that
the Yen-LIBOR and Euroyen TIBOR are each a "commodity" within the
meaning of the Commodity Exchange Act, Daniels said.
However, Daniels agreed with the banks' argument that Laydon did not
have standing to sue for antitrust violations. Although Laydon
alleged that he suffered net losses because of the banks' rate
rigging, the lawsuit "does not allege facts that competition was
harmed in any way," Daniels said.
Daniels also said the unjust enrichment claims fail because Laydon
failed to show any relationship between himself and the banks or how
the banks benefited at Laydon's expense.
The case is: Jeffrey Laydon et al v Mizuho Bank Ltd et al, U.S.
District Court, Southern District of New York, No 12-cv-3419
(Reporting by Dena Aubin; editing by Andrew Hay)
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