17 Dec Goldman Pays $56.5M To Exit ISDAfix Bid-Rigging Suit

Goldman Sachs Group in Alaska Electrical Pension Fund v. Bank Of America Corp. et al., Case No. 1:14-cv-07126 (S.D.N.Y Dec. 15, 2016), agreed to hand over information in the ongoing litigation and to pay $56.5 million to settle this class action lawsuit, which accused it and other banks of rigging an interest rate benchmark used in the $553 trillion derivatives market.  The settlement comes after the banks lost a motion to dismiss the investors’ complaint in March.

Goldman Sachs joins seven other financial institutions who agreed to pay a combined $324 million to settle the allegations against them. Court documents revealed JPMorgan Chase & Co. agreed to pay $52 million to settle the case; Bank of America Corp, Credit Suisse AG, Deutsche Bank AG and The Royal Bank of Scotland PLC each agreed to pay $50 million; Citigroup Inc. agreed to a $42 million payout; and Barclays PLC will pay $30 million to resolve the claims.

This is the largest individual settlement reached so far in the ISDAfix litigation.  The suit has yielded hundreds of millions of dollars in deals.

The class action was initiated by investors in September 2014, who alleged Goldman Sachs was part of a conspiracy with several other banks to rig the ISDAfix benchmark rate.  The ISDA determines valuations for interest rate derivative products, such as swaps transactions.

The banks worked closely with interdealer broker ICAP PLC, which until January 2014 was tasked by the International Swaps and Derivatives Association with managing the daily setting of the U.S. dollar-rate version of ISDAfix.

“Co-lead counsel and plaintiffs believe the Goldman Sachs settlement agreement, standing alone or in conjunction with the other settlements, is well within the range of fairness, adequacy and reasonableness,” the investors said.

Goldman Sachs declined to comment on the settlement.