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U.S. Judge Dismisses Rate-Rigging Lawsuit Against Nine Banks
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The lawsuit filed against nine large banks over rigging of the Canadian Dealer Offered Rate (CDOR), to boost profits from derivate trading, was yesterday dismissed by U.S. District Judge Analisa Torres in Manhattan. The news was reported by Reuters.
The CDOR, now known as Canadian Dollar Offered Rate, is the rate at which banks would lend to corporate clients using bankers' acceptances.
Several investors, along with the lead plaintiff, the Fire & Police Pension Association of Colorado, had filed a lawsuit against nine banks, six of which are Canadian. They claimed that these banks collectively tried to manipulate the CDOR between August 2007 and June 2014, in a bid to reduce interest payments on derivative transactions, including swaps and Canadian dollar futures contracts within the United States, that were based on the CDOR.
The defendants included Royal Bank of Canada (RY - Free Report) , The Toronto-Dominion Bank (TD - Free Report) , The Bank of Nova Scotia (BNS - Free Report) , Bank of Montreal (BMO - Free Report) , Canadian Imperial Bank of Commerce (CM - Free Report) , National Bank of Canada, Bank of America, Deutsche Bank and HSBC Holdings.
However, the judge rejected all of the racketeering and antitrust claims against the banks, stating that the suspected wrongdoing occurred in Canada, which is not covered by the U.S. anti-racketeering law — RICO.
Moreover, according to the judge, there was no proof of any common profit motive within the nine banks, which would have made them suppress the CDOR.
When requested for comments, the lawyers for the plaintiff did not respond immediately.
Notably, after the Investment Industry Regulatory Organization of Canada acknowledged that there were possibilities for manipulation, in January 2013, regulators in Canada had updated the CDOR-setting process.
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U.S. Judge Dismisses Rate-Rigging Lawsuit Against Nine Banks
The lawsuit filed against nine large banks over rigging of the Canadian Dealer Offered Rate (CDOR), to boost profits from derivate trading, was yesterday dismissed by U.S. District Judge Analisa Torres in Manhattan. The news was reported by Reuters.
The CDOR, now known as Canadian Dollar Offered Rate, is the rate at which banks would lend to corporate clients using bankers' acceptances.
Several investors, along with the lead plaintiff, the Fire & Police Pension Association of Colorado, had filed a lawsuit against nine banks, six of which are Canadian. They claimed that these banks collectively tried to manipulate the CDOR between August 2007 and June 2014, in a bid to reduce interest payments on derivative transactions, including swaps and Canadian dollar futures contracts within the United States, that were based on the CDOR.
The defendants included Royal Bank of Canada (RY - Free Report) , The Toronto-Dominion Bank (TD - Free Report) , The Bank of Nova Scotia (BNS - Free Report) , Bank of Montreal (BMO - Free Report) , Canadian Imperial Bank of Commerce (CM - Free Report) , National Bank of Canada, Bank of America, Deutsche Bank and HSBC Holdings.
However, the judge rejected all of the racketeering and antitrust claims against the banks, stating that the suspected wrongdoing occurred in Canada, which is not covered by the U.S. anti-racketeering law — RICO.
Moreover, according to the judge, there was no proof of any common profit motive within the nine banks, which would have made them suppress the CDOR.
When requested for comments, the lawyers for the plaintiff did not respond immediately.
Notably, after the Investment Industry Regulatory Organization of Canada acknowledged that there were possibilities for manipulation, in January 2013, regulators in Canada had updated the CDOR-setting process.
Of the banks mentioned above, Royal Bank of Canada, Bank of Montreal and BofA currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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