Investors suing Credit Suisse Group AG (CSGN), Bank of America Corp. and other companies over claims they artificially suppressed Libor lost a bid for some documents related to a U.S. Justice Department investigation.
In denying the investors’ request yesterday, U.S. District Judge Naomi Reice Buchwald in Manhattan, who’s presiding over 21 class-action lawsuits, cited a letter from the department claiming that a release of the documents may interfere with its criminal antitrust probe.
“To me, it is simply too much to have them piggyback on the government’s investigation at this stage,” the judge said in a ruling from the bench. “It is quite clear from the Department of Justice’s letter that they would have serious problems with my granting the request.”
The multidistrict litigation before the judge involves group lawsuits filed against member banks of the British Bankers’ Association London Interbank Offer Rate Panel, known as Libor. The member banks are accused of conspired to artificially suppress Libor by understating their borrowing costs to the BBA.
Buchwald said that if she agreed to let investors have the documents they want, it would “inhibit the fullest response to the government requests for information.”
‘Enormous Litigation Benefit’
“If the government finds wrongdoing, the plaintiffs will get an enormous litigation benefit from that,” she told lawyers.
Plaintiffs include those which directly engaged in transactions with one or more of the defendants in over-the- counter transactions, most commonly interest rate swaps, Buchwald said in an order filed in the case last year.
A second group of plaintiffs are investors who didn’t directly transact with the defendants and instead purchased financial products tied to Libor on an exchange, such as the Chicago Mercantile Exchange or the Chicago Board of Trade.
Both sets of plaintiffs assert antitrust claims.
The case is In re: LIBOR-Based Financial Instruments Antitrust Litigation, 11-MD-2262, Southern District of New York (Manhattan).
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