Barclays 2013 Annual Report Download - page 339

Note 30: Legal, competition and regulatory matters continued
LIBOR and other Benchmarks Civil Actions
Following the settlements of the investigations referred to below in “Investigations into LIBOR, ISDAfix, other benchmarks and foreign exchange
rates”, a number of individuals and corporates in a range of jurisdictions have threatened or brought civil actions against the Group in relation to
LIBOR and/or other benchmarks. The majority of the USD LIBOR cases, which have been filed in various US jurisdictions, have been consolidated
for pre-trial purposes in the US District Court for the Southern District of New York (MDL Court). The complaints are substantially similar and
allege, amongst other things, that BBPLC and the other banks individually and collectively violated provisions of the US Sherman Act, the US
Commodity Exchange Act (CEA), the US Racketeer Influenced and Corrupt Organizations Act (RICO) and various state laws by manipulating USD
LIBOR rates. The lawsuits seek unspecified damages with the exception of three lawsuits, in which the plaintiffs are seeking a combined total of
approximately $910m in actual damages against all defendants, including BBPLC, plus punitive damages. Some of the lawsuits seek trebling of
damages under the US Sherman Act and RICO. Certain of the civil actions are proposed class actions that purport to be brought on behalf of
(amongst others) plaintiffs that (i) engaged in USD LIBOR-linked over-the-counter transactions (OTC Class); (ii) purchased USD LIBOR-linked
financial instruments on an exchange (Exchange-Based Class); (iii) purchased USD LIBOR-linked debt securities (Debt Securities Class); (iv)
purchased adjustable-rate mortgages linked to USD LIBOR; or (v) issued loans linked to USD LIBOR.
In March 2013, the MDL Court issued a decision dismissing the majority of claims against BBPLC and the other banks in three lead proposed class
actions (Lead Class Actions) and three lead individual actions (Lead Individual Actions). Following the decision, plaintiffs in the Lead Class Actions
sought permission to either file an amended complaint or appeal an aspect of the March 2013 decision. In August 2013, the MDL Court denied the
majority of the motions presented in the Lead Class Actions. As a result, the Debt Securities Class has been dismissed entirely; the claims of the
Exchange-Based Class have been limited to claims under the CEA; and the claims of the OTC Class have been limited to claims for unjust
enrichment and breach of the implied covenant of good faith and fair dealing. Subsequent to the MDL Court’s March 2013 decision, the plaintiffs
in the Lead Individual Actions filed a new action in California state court (since moved to the MDL Court) based on the same allegations as those
initially alleged in the proposed class action cases discussed above. Various plaintiffs may attempt to bring appeals of some or all of the MDL
Court’s decisions in the future.
Additionally, a number of other actions before the MDL Court remain stayed, pending further proceedings in the Lead Class Actions.
Until there are further decisions, the ultimate impact of the MDL Court’s decisions will be unclear, although it is possible that the decisions will be
interpreted by courts to affect other litigation, including the actions described below, some of which concern different benchmark interest rates.
BBPLC and other banks also have been named as defendants in other individual and proposed class actions filed in other US District Courts in
which plaintiffs allege, similar to the plaintiffs in the USD LIBOR cases referenced above, that in various periods defendants either individually or
collectively manipulated the USD LIBOR, Yen LIBOR, Euroyen TIBOR and/or EURIBOR rates. Plaintiffs generally allege that they transacted in loans,
derivatives and/or other financial instruments whose values are affected by changes in USD LIBOR, Yen LIBOR, Euroyen TIBOR and/or EURIBOR,
and assert claims under federal and state law. In October 2012, the US District Court for the Central District of California dismissed a proposed
class action on behalf of holders of adjustable rate mortgages linked to USD LIBOR. Plaintiffs have appealed, and briefing of the appeal
is complete.
In addition, BPLC has been granted conditional leniency from the Antitrust Division of the US Department of Justice (DOJ-AD) in connection with
potential US antitrust law violations with respect to financial instruments that reference EURIBOR. As a result of that grant of conditional leniency,
BPLC is eligible for (i) a limit on liability to actual rather than treble damages if damages were to be awarded in any civil antitrust action under US
antitrust law based on conduct covered by the conditional leniency and (ii) relief from potential joint-and-several liability in connection with such
civil antitrust action, subject to BPLC satisfying the DOJ-AD and the court presiding over the civil litigation of its satisfaction of its cooperation
obligations.
BPLC, BBPLC and BCI have also been named as defendants along with four former officers and directors of BBPLC in a proposed securities class
action pending in the SDNY in connection with BBPLC’s role as a contributor panel bank to LIBOR. The complaint asserts claims under Sections
10(b) and 20(a) of the US Securities Exchange Act 1934, principally alleging that BBPLC’s Annual Reports for the years 2006 to 2011 contained
misstatements and omissions concerning (amongst other things) BBPLC’s compliance with its operational risk management processes and
certain laws and regulations. The complaint also alleges that BBPLC’s daily USD LIBOR submissions constituted false statements in violation of
US securities law. The complaint was brought on behalf of a proposed class consisting of all persons or entities that purchased BPLC-sponsored
American Depositary Receipts on a US securities exchange between 10 July 2007 and 27 June 2012. In May 2013, the court granted BBPLC’s
motion to dismiss the complaint in its entirety. Plaintiffs have appealed, and briefing of the appeal is complete.
In addition to US actions, legal proceedings have been brought or threatened against the Group in connection with alleged manipulation of LIBOR
and EURIBOR, in a number of jurisdictions. The first of which in England and Wales, brought by Graiseley Properties Limited, is set down for trial in
the High Court of Justice in April 2014. The number of such proceedings, the benchmarks to which they relate, and the jurisdictions in which they
may be brought are anticipated to increase over time.
Civil Actions in Respect of Foreign Exchange Trading
Since November 2013, a number of civil actions have been filed in the SDNY on behalf of proposed classes of plaintiffs alleging manipulation of
foreign exchange markets under the US Sherman Antitrust Act and New York state law and naming several international banks as defendants,
including BBPLC.
Please see below ‘Investigations into LIBOR, ISDAfix, other benchmarks and foreign exchange rates’ for a discussion of competition and regulatory
matters connected to “LIBOR and other Benchmark Civil Actions”.
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