On 4 December 2013 the EU Commission fined eight international banks for participation in cartels in Euro interest rate derivatives and Yen interest rate derivatives. This is another chapter in the LIBOR fixing scandal that has rocked the financial world and led to the worldwide exposure of wrongdoing by bank executives. Deutsche Bank, Barclays, Societe Generale, RBS, Credit Agricole, JP Morgan and HSBC were fined for exchanging information in their submissions in the EURIBOR between September 2005 and May 2008 although Barclays received complete immunity for the fines under the Commission’s leniency programme.
Concurrently, the Commission fined several banks including Deutsche Bank, RBS, UBS and Cititgroup for collusion between 2007 and 2010 in JPY LIBOR submissions. In this instance, it was UBS and Citigroup who received immunity under the leniency programme. The fines on the other banks were also reduced by 10% as the banks agreed to settle the case with the Commission rather than oppose the fines.
The case is significant not only due to the totality of the fines being the highest ever imposed by the Commission but also because the case represents the first two cartel decisions in the financial sector since the crisis of 2008. The fines also show the merits of companies being first through the door in the Commission’s leniency programmes with Barclays and others saving themselves hundreds of millions of Euros in fines. Several banks and brokers including HSBC and Credit Agricole rejected the EU’s current settlement offers and could be subject to fines as a later date. The banks implicated in these latest rate rigging cartel decisions now face the prospect of a wave of litigation claiming substantial damages brought by companies and individuals that have suffered loss as a result of the activities of these cartels.
This article first appeared in our monthly EU & Competition Law Update. Please find the latest issue on the right hand side of this page.