Supreme Court rejects appeal by banks in Libor suit News
Supreme Court rejects appeal by banks in Libor suit

[JURIST] The US Supreme Court [official website] on Tuesday rejected [order list, PDF] an appeal by several large banks asking to dismiss lawsuits brought by private investor groups accusing them of conspiring to manipulate the Libor benchmark interest rate. The investors alleged that Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. conspired to suppress the London Interbank Offered Rate (Libor), between 2007 and 2009 in an effort to make their financial standing appear healthier. The move allows the investor groups to go forward with their lawsuits against the banks.

The effects of the 2008 financial crisis are still reverberating through the legal system. Last year the US Court of Appeals for the Second Circuit overturned [JURIST report] a 2013 jury verdict that found Bank of America liable for fraud and imposed a penalty of more than $1.2 billion. Also last year a federal judge ruled [JURIST report] that the government did not have grounds to designate the major insurance company, Metlife, as “too big to fail,” a designation only four firms have received. The Financial Stability Oversight Council determined in 2014 that financial distress at Metlife could significantly affect the national economy and therefore the company deserves increased federal scrutiny. The judge held, however, that such a designation was unsupported by substantial evidence and disregards the costs that Metlife will inevitably suffer. In February Morgan Stanley agreed to pay about $3.2 billion to settle charges that it misled investors in residential mortgage-backed securities [JURIST report].