Today, Citigroup reached a $23 million settlement in a class action suit alleging Citi and other major banks conspired to fix yen-denominated Libor interest rates. Observers believe is the first of many deals to be struck in the case. On Monday, lawyers for a group of investors asked a judge to approve the proposed settlement with Citigroup Inc. and its subsidiaries. As these are the first deals to be struck, they are considered to be "ice breakers." The case originated from a global investigation into an alleged plot among major banks to manipulate Libor to the benefit of their own trading positions.
As part of the proposed pact, the firms have agreed to cooperate with the plaintiffs in pursuing the remaining claims.
The multiyear Libor investigation has focused on whether employees at the world’s largest banks made fraudulent submissions to a London-based trade association that calculated and published the benchmark interest rate. Several major banks, including Barclays PLC, UBS AG and The Royal Bank of Scotland PLC have already reached settlements.
In the investor lawsuit, Citigroup and about 20 other banks are accused of rigging yen Libor, Euroyen Tibor and Euroyen Tibor contracts. The defendants include Deutsche Bank AG, Barclays and JP Morgan Chase as well as a number of Japanese banks.
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