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Court reinstates lawsuits alleging rate collusion by banks

NEW YORK, N.Y. – A federal appeals court in New York City has reinstated lawsuits against 16 of the world’s largest banks alleging they colluded to manipulate a benchmark interest rate.

The 2nd U.S. Circuit Court of Appeals in Manhattan on Monday restored the lawsuits, which had been dismissed by a judge. The lawsuits were brought by investors in financial instruments mostly issued by the banks and had sought billions of dollars in damages. The financial instruments carried interest rates tied to the London interbank offered rate, known as LIBOR.

The lawsuits had been dismissed by a judge who reasoned the LIBOR setting process was collaborative rather than competitive. The judge also found any manipulation of the rate did not cause investors anticompetitive harm.

A lawyer for the banks says they’re considering the ruling.