A recent Law 360 story by Reenat Sinay, “5 Big Banks Get Final OK on $22M Libor-Rigging Settlement” reports that a New York federal judge signed off on a nearly $22 million settlement between five major banks and a class of indirect investors that accused them of manipulating the Libor benchmark.  The latest deal in the sprawling Libor litigation will see JPMorgan, Citibank, Bank of America, HSBC and Barclays resolve claims by over-the-counter, or OTC, investors that had indirect interactions with the banks through interest rate swaps and other transactions.  The investors purchased instruments from financial institutions that are not defendants in the case.

In addition to the cash award, the five banks agreed to provide "significant cooperation" to the investors in their continuing case against nonsettling banks.  At a telephone hearing before U.S. District Judge Naomi Reice Buchwald, Steven J. Greenfogel of Lite DePalma Greenberg LLC, an attorney for the investors, described the agreement as "excellent."  Greenfogel noted that an "extremely robust" notice to tens of thousands of potential class members had not turned up a single objector to the deal, which he said "speaks very well for the settlements themselves."

Judge Buchwald also approved the request from the plaintiffs' attorneys for a fee of 28% of the settlement, or nearly $6.1 million.  In arguing for approval of the attorney fees, Jason A. Zweig of Hagens Berman Sobol Shapiro LLP said the plaintiffs attorneys' diligence in the case allowed the nondefendant OTC investors to carve out a settlement of their own.  It otherwise may have been subsumed by other class settlements, he said.

Although the judge said the fee application was "somewhat unique" in her experience, she concluded that it was "not inconsistent with other rewards in this case."  According to Zweig, the judge's comment may refer to the unique nature of the case, which has been stayed throughout most of the nine-year litigation.  Judge Buchwald granted permission to this class of investors to move for a settlement of the claims despite the stay.