Goldman Sachs Reaches $56.5M Settlement in ISDAfix Antitrust Suit

This is a settlement for the Antitrust lawsuit.

Santa Clara, CA: A $56.5 million agreement has been reached potentially enabling Goldman Sachs to exit an antitrust class action in which it is accused of participating in price-fixing the ISDAfix benchmark rate, along with several other banks. The rate is used to set terms for interest rate derivative products.

The total settlement amount agreed by the various defendants is $324 million. The banks involved are JPMorgan Chase & Co. who agreed to pay $52 million, and Bank of America Corp, Credit Suisse AG, Deutsche Bank AG and The Royal Bank of Scotland PLC who each agreed to pay $50 million. Citigroup Inc. agreed to pay $42 million while Barclays PLC will pay $30 million to resolve the claims, according to court documents.

The suit was brought by institutional investors in September 2014, alleging the banks worked closely with interdealer broker ICAP PLC. Up until January 2014 ICAP PLC was tasked by the International Swaps and Derivatives Association with managing the daily setting of the U.S. dollar-rate version of ISDAfix.

In setting this rate, the banks had to submit rate quotes, which ICAP compiled. However, the plaintiffs claims that the defendants worked together to fix the set rate at a point where they would most profit by it. This included taking part in a process where they bought and sold derivative products just before the fix was closed in order to get the price they wanted, known within the industry as "banging the close."

The settlement is the largest individual reached to date in this litigation. The case is Alaska Electrical Pension Fund v. Bank Of America Corp. et al., case number 1:14-cv-07126, in the U.S. District Court for the Southern District of New York.