(Reuters) – A federal judge in Manhattan on Thursday dismissed a trial by investors accusing nine major banks, including six from Canada, of conspiring to manipulate a Canadian benchmark to improve the profits of derivative trading.
U.S. District Director Analisa Torres rejected racketeering and antitrust claims by the leading plaintiff, the Fire & Police Pension Association of Colorado, against the Royal Bank of Canada, the Toronto-Dominion Bank, Nova Scotia Bank and other banks.
The plaintiff's lawyers did
The proposed course action concerned the alleged repression of August 2007 to June 2014 of the Canadian supplier-delivered rate, a rate that banks would lend to corporate customers with bank acceptance,
CDOR, now called it Canadian Dollar Offered Rate, calculated daily by Thomson Reuters based on bank contributions.
The complainant accused banks of manipulating CDOR to reduce interest rates to investors on CDOR-based derivative transactions in the United States, including swaps and Canadian dollar futures contracts, and increasing profits.
But the judge said the alleged erroneous behavior occurred in Canada, which is not covered by the US anti-racketeering law called Rico, and the plaintiff failed to show that any rig left it worse.
Judge Torres also found no evidence of a joint profit motive among the banks to suppress CDOR because they held more CDOR-based derivative contracts, under which they made interest payments than CDOR-based loans, on which they received interest payments.
Other respondents included the Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Bank of America Corp., Deutsche Bank AG and HSBC Holdings PLC.
Canadian regulators updated the CDOR setup process after the Canadian Industry Investment Regulatory Organization in January 201
The case is Fire & Police Pension Association of Colorado against Bank of Montreal et al ., US District Court, Southern District of New York, No. 18-00342.