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U.S. top court rejects banks over Libor antitrust lawsuits

By Lawrence Hurley

WASHINGTON (Reuters) - The U.S. Supreme Court on Tuesday allowed private antitrust lawsuits brought by investors including big U.S. cities accusing major banks of conspiring to manipulate the pivotal Libor benchmark interest rate to move forward. The justices rejected an appeal filed by a group of banks including Bank of America Corp, Deutsche Bank AG, UBS AG and JPMorgan Chase & Co of a May 2016 ruling by the New York-based 2nd U.S. Circuit Court of Appeals that allowed various lawsuits against them to proceed.

The appeals court reversed a lower court judge's dismissal of investors' antitrust claims against the banks.

Libor, or the London Interbank Offered Rate, underpins hundreds of trillions of dollars of transactions and is used to set rates on credit cards, student loans and mortgages. It is calculated based on submissions by banks that sit on panels.

Investors including the University of California and cities such as Baltimore, Houston and Philadelphia accused the big banks of suppressing Libor during the 2007-2009 financial crisis to boost earnings or make their finances appear healthier.

The appeals court ruling buttressed investors in several lawsuits in Manhattan seeking to hold banks liable for billions of dollars in damages for alleged price-fixing in U.S. Treasuries, commodities, currencies, derivatives and other rates.

One such lawsuit, concerning credit default swaps, led to a $1.86 billion settlement in 2015 with a dozen banks.

The appeals court ruling also overturned a 2013 dismissal by a federal judge in Manhattan of antitrust claims that could justify triple damages.

Some other banks that were sued are Barclays Plc, Citigroup Inc, Credit Suisse Group AG, HSBC Holdings Plc, Royal Bank of Canada, Rabobank BA [RABOY.UL], Royal Bank of Scotland Group Plc and Societe Generale.

The private litigation is separate from Libor rigging probes that have resulted in roughly $9 billion of sanctions worldwide, including $2.5 billion against Deutsche Bank in April 2015. Several bank affiliates have pleaded guilty to criminal charges, and more than 20 people have been criminally charged.

(Additional reporting by Jonathan Stempel in New York)