Deutsche, JPM Move to Settle Libor Class Action

Deutsche Bank and JP Morgan have filed court documents
seeking to settle a class action claim brought against them and other market
participants over alleged Yen interest rate benchmark manipulation.

The documents were filed Friday in the US District Court of
Southern New York and while the two banks do not admit liability or wrongdoing,
Deutsche has agreed to pay $77 million and JP Morgan $71 million.

These settlements are more than double those agreed by HSBC
($35 million) and Citi ($23 million) last year.

The class action was led by Sonterra Capital and claims that
multiple banks and inter-dealer brokers conspired to manipulate the Japanese
yen London Interbank Offered Rate (Libor) as well as Euroyen Tokyo Interbank
Offered Rate (Tibor) rate settings.

While inter-dealer broker RP Martins agreed to cooperate
last year and and the claim against Icap was dismissed, banking groups that
have yet to settle include UBS, Mizuho, Bank of Tokyo-Mitsubishi UFG, Sumitomo,
Norinchukin Bank, , Resona Bank, Shoko Chukin Bank, Shinkin Central Bank, Bank
of Yokohama, Societe Generale, Royal Bank of Scotland, Barclays,
Raiffesien-Boerenleebank, Lloyds Bank, and Bank of America.

The proposed settlement comes as two former Rabobank
interest rate traders won an appeal against a conviction in the US over Libor

The 2nd Circuit US Court of Appeal ruled on
Wednesday that the convictions of Anthony Allen and Anthony Conti be overturned
because testimony they had been compelled to give UK regulators was used at
their trial. 

Allen and Conti were convicted in 2015 of fraud and
conspiracy for trying to manipulate US dollar and Japanese yen Libor fixings
and sentenced to two years and one year in prison respectively. 

The success of the appeal and the throwing
out of the case against five RP Martins brokers
in January 2016 have raised
doubts over the conviction of former Citi and UBS trader Tom Hayes who was sentenced
to 14 years in jail
in 2015 (later reduced to 11 years) for his role in the
alleged rigging of Libor.

Twitter @lamboPnL

Twitter @Profit_and_Loss

Colin Lambert

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