HSBC agrees to pay $100m to settle US antitrust suit

Litigant investors say deal is substantially fair given hurdles they would face in court

The proposed settlement with HSBC follows similar agreements the investor group reached with Barclays, Citigroup and, most recently, Deutsche Bank over similar allegations. Photograph: Justin Tallis/AFP/Getty Images

The proposed settlement with HSBC follows similar agreements the investor group reached with Barclays, Citigroup and, most recently, Deutsche Bank over similar allegations. Photograph: Justin Tallis/AFP/Getty Images

 

HSBC has agreed to pay $100 million to settle an antitrust lawsuit by over-the-counter investors in the United States, including the city of Baltimore and Yale University, who claimed they were harmed when they bought securities tied to rigged Libor.

The settlement will need to be approved by a federal judge in Manhattan.

The investors said in their request for preliminary approval on Thursday that the deal was substantially fair given the hurdles they would face to get a favourable jury verdict in the six-year-old case that’s currently before an appeals court.

“This litigation presents the court, the parties, and eventually, a jury, with the task of understanding extremely complex derivative instruments in an opaque, unregulated market,” according to the court filing. “This makes proving liability and damages, both of which would have required the assistance of experts, all the more risky.”

About a dozen firms have now paid almost $9 billion in fines to resolve government investigations around the world into rigging of the key benchmark. Libor is used to set interest rates every business day for myriad financial instruments.

The investors’ antitrust claims were reinstated by a court of appeals in 2016 after a trial judge had dismissed them. The claims against HSBC and some of the other banks were dismissed a second time on jurisdictional grounds, which is the subject of the pending appeal.

“We are pleased the matters are resolved,” HSBC said in an emailed statement. – Bloomberg