Deutsche Bank agrees to pay $170m to settle Euribor manipulation lawsuit

Maria Nikolova

As a part of the settlement, Deutsche Bank did not admit any wrongdoing. It settled to avoid the cost of further litigation, as its legal expenses have surpassed €15 billion ($16.8 billion) since 2009.

One of the world’s biggest FX interbank dealers Deutsche Bank AG (ETR:DBK) has managed to settle an investor lawsuit over alleged manipulation of European Interbank Offered Rate (Euribor).

According to a report by Reuters, the bank has reached a preliminary settlement with plaintiffs, including the California State Teachers’ Retirement System (CalSTRS) and FrontPoint Australian Opportunities Trust. Investors had accused the bank of conspiring to rig Euribor and fix prices of Euribor-based derivatives from June 2005 to March 2011 to profit at the investors’ expense, thus violating the United States antitrust law.

The preliminary settlement was filed on Monday at the New York Southern District Court and requires a judge’s approval. As a part of the settlement, Deutsche Bank does not admit any wrongdoing and agrees to pay $170 million.

There are a number of benchmark rate manipulation cases against big banks at the New York Southern District Court. In May this year, FinanceFeeds reported that HSBC and US bondholders had managed to reach a settlement over alleged Libor manipulation by the bank. The bondholders claim that Libor rigging had caused them to receive artificially low returns on more than $500 billion of dollar-denominated debt whose interest payouts were linked to Libor.

The preliminary settlement, reached on Monday, allows Deutsche Bank to avoid costs associated with further litigation. The bank’s legal expenses have exceeded €15 billion ($16.8 billion) since 2009. In April this year, the US Federal Reserve has announced the imposition of $156.6 million in civil monetary penalties on the bank. The penalty included a fine of $136,950,000 over unsound FX practices, as well as a $19.71 million fine for non-compliance with the Volcker rule.

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