Swiss Franc LIBOR Class Action: Credit Suisse Settlement

While we have written frequently on various LIBOR-related litigations, this post will focus on a yet-uncovered action—Sonterra Capital Master Fund, Ltd. V. Credit Suisse Group AG et al.—targeting the Swiss Franc LIBOR.

The 2015 class action complaint, brought by Sonterra Capital against Credit Suisse, JP Morgan, RBS, UBS, and a series of Doe defendants, alleged that Defendants had engaged in a conspiracy to manipulate Swiss Franc LIBOR and the prices of Swiss Franc LIBOR-based derivatives.  As with the many other LIBOR actions, the heart of the allegations concerns misreporting: namely, that Defendants failed to accurately report their borrowing costs—the basis for the Swiss Franc LIBOR calculation—and instead altered their pricing submissions to manipulate the prices of financial instruments based on that metric, for their own financial benefit. 

While this litigation has been steadily winding its way through the court system, a recently filed motion for approval of a class action settlement with Credit Suisse may mark the beginning of the end for this particular set of claims.  While Defendant UBS and various Broker Defendants have yet to settle, the proposed Credit Suisse settlement follows closely on the heels of recent settlements with NatWest Markers PLC (f/k/a/ the Royal Bank of Scotland PLC) (“RBS”) and Deutsche Bank—for which a motion preliminarily approval was submitted in June—and with JPMorgan Chase, which was preliminarily approved in 2017.  The 2022 settlements further follow a remand order from the Second Circuit, which directed further proceedings in light of their recent decision in Fund Liquidation Holdings LLC v. Bank of America, 991 F.3d 370 (2d Cir. 2021) (a SIBOR case concerning Article III standing, which we previously summarized here).

The earlier settlement with JPMorgan netted $22 million for the class, while the settlements with RBS and Deutsche Bank came in at $21 million and $13 million, respectively.  The most recent settlement with Credit Suisse came in at $13.75 million, with the four settlements totaling $69.75 for the Settlement Class.

In each of the four settlements, the Settlement Class was defined as follows:

All Persons (including both natural persons and entities) who purchased, sold, held, traded, or otherwise had any interest in Swiss Franc LIBOR-Based Derivatives during the period of January 1, 2001 through December 31, 2011 (the “Class Period”), provided that, if Representative Plaintiffs expand the Class in any subsequent amended complaint, class motion, or settlement, the defined Class in this Agreement shall be expanded so as to be coterminous with such expansion. Excluded from the Settlement Class are the Defendants and any parent, subsidiary, affiliate or agent of any Defendant or any co-conspirator whether or not named as a Defendant, and the United States Government.

The 2022 settlements likewise adopt the notice program set out in the previously approved JP Morgan Settlement, and seeks to appoint the same Class Counsel, Lowey Dannenberg, P.C.  Credit Suisse, RBS, and Deutsche Bank all agree to provide “Cooperation Materials” to advance the case against the non-settlement defendants and to identify potential Class Members.  All settlements further contain a clause stating “that the Settlement Amount will not revert, regardless of how many Class Members submit proofs of claim.”  This is important “because claim rates typically fall below 100%,” so the non-revision term will enhance the recovery of the authorized plaintiffs.  

The 2022 settlements all limit the request for attorneys’ fees to twenty-eight percent of the settlement amounts, or $19.53 million.

Beyond the settlement documents, there have been limited filings since the October 2021 remand from the Second Circuit. While it is yet to be seen what the next steps will be for UBS and the other non-settling defendants, we will update the blog with any future developments.

This post was written by Alexandra M.C. Douglas

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