RBS 2014 Annual Report Download - page 106

104
RBS – Interim Results 2015
Notes
16. Litigation, investigations and reviews (continued)
London Interbank Offered Rate (LIBOR)
Certain members of the Group have been named as defendants in a number of class actions and individual
claims filed in the US with respect to the setting of LIBOR and certain other benchmark interest rates. The
complaints are substantially similar and allege that certain members of the Group and other panel banks
individually and collectively violated various federal laws, including the US commodities and antitrust laws,
and state statutory and common law, as well as contracts, by manipulating LIBOR and prices of LIBOR-
based derivatives in various markets through various means.
Most of the USD LIBOR-related actions in which RBS companies are defendants, including all purported
class actions relating to USD LIBOR, have been transferred to a coordinated proceeding in the United States
District Court for the Southern District of New York. In the coordinated proceeding, consolidated class action
complaints were filed on behalf of (1) exchange-based purchaser plaintiffs, (2) over-the-counter purchaser
plaintiffs, and (3) corporate debt purchaser plaintiffs. In orders dated 29 March 2013 and 23 June 2014, the
Court dismissed plaintiffs' antitrust claims and claims under RICO (Racketeer Influenced and Corrupt
Organizations Act), but declined to dismiss (a) certain Commodities Exchange Act claims on behalf of
persons who transacted in Eurodollar futures contracts and options on futures contracts on the Chicago
Mercantile Exchange (on the theory that defendants' alleged persistent suppression of USD LIBOR caused
loss to plaintiffs), and (b) certain contract and unjust enrichment claims on behalf of over-the-counter
purchaser plaintiffs who transacted directly with a defendant.
The Court’s dismissal of plaintiffs’ antitrust claims is currently on appeal to the United States Court of
Appeals for the Second Circuit. Over 35 other USD LIBOR-related actions involving RBS, including
purported class actions on behalf of lenders and mortgage borrowers, are subject to motions to dismiss that
are being litigated. Discovery has been stayed in all cases in the coordinated proceeding pending further
order from the Court.
Certain members of the Group have also been named as defendants in class actions relating to (i) JPY
LIBOR and Euroyen TIBOR, (ii) Euribor, (iii) Swiss Franc LIBOR, and (iv) Pound sterling LIBOR, all of which
are pending in the United States District Court for the Southern District of New York. On 28 March 2014, the
Court in the action relating to Euroyen TIBOR futures contracts dismissed the plaintiffs’ antitrust claims, but
refused to dismiss their claims under the Commodity Exchange Act for price manipulation.
Details of LIBOR investigations and their outcomes affecting RBS are set out under ‘Investigations and
reviews’ on page 108.
ISDAFIX antitrust litigation
Beginning in September 2014, RBS plc and a number of other financial institutions were named as
defendants in several purported class action complaints (now consolidated into one complaint) alleging
manipulation of USD ISDAFIX rates, to the detriment of persons who entered into transactions that
referenced those rates. The complaints were filed in the United States District Court for the Southern District
of New York and have been consolidated. The consolidated complaint contains claims for violations of the
US antitrust laws, contract claims, and claims for tortious interference with contract. This matter is subject to
pre-discovery motions to dismiss some or all of the claims against the defendants.