32 Pages Posted: 16 Sep 2016 Last revised: 20 Jan 2017
Date Written: September 27, 2016
This amicus brief, filed with the Second Circuit Court of Appeals in Gelboim v. Bank of America (LIBOR Manipulation Litigation), primarily aims to help the Court by providing relevant background information. Many of the plaintiffs in this case are bringing antitrust claims based on defendant banks' alleged collusion while selling plaintiffs over-the-counter derivatives. To evaluate these plaintiffs’ allegations, one must understand the nature of these derivative transactions, the economics of the over-the-counter derivatives market, and the specific role that the London Interbank Offer Rate (“LIBOR”) plays in that market. This brief provides that information.
With this background in place, it becomes clear that these plaintiffs have properly alleged an antitrust injury. Plaintiffs allege that defendants, who controlled the over-the-counter derivatives market, conspired to manipulate LIBOR in order to increase their profits in the over-the-counter derivatives market. Plaintiffs allege that they, in their capacity as defendants’ customers in the over-the-counter derivatives market, suffered an injury as a result of defendants’ collusive LIBOR-setting behavior. Taking plaintiffs’ allegations as true, this is a classic antitrust injury.
Accordingly, this court should reverse the district court’s opinion and remand for further proceedings.
Keywords: LIBOR, London Interbank Offer Rate, LIBOR Manipulation, antitrust, financial markets, derivatives, derivatives markets, OTC derivatives, OTC derivatives markets, over-the-counter derivatives, over-the-counter derivatives markets, antitrust injury, Bank of America, Gelboim, amicus, corporate finance
JEL Classification: G00, G12, G21, G23, K21, L41
Suggested Citation: Suggested Citation
Barry, Jordan M. and Broughman, Brian J. and Chaffee, Eric C. and Henkel, Christoph and Hockett, Robert C. and Malloy, Michael P. and Marchetti, Peter and Odinet, Christopher K. and Pouncy, Charles R. P. and Verstein, Andrew, Amicus Curiae Brief in Gelboim v. Bank of America (Libor Manipulation Litigation) on Behalf of Financial Markets Law Professors in Support of Plaintiffs-Appellants (September 27, 2016). Florida International University Legal Studies Research Paper No. 15-37; Cornell Legal Studies Research Paper No. 16-40; Mississippi College School of Law Research Paper No. 2016-08; San Diego Legal Studies Paper No. 16-231; University of Toledo Legal Studies Research Paper No. 2016-05; Indiana Legal Studies Research Paper No. 355. Available at SSRN: https://ssrn.com/abstract=2839130