WASHINGTON (CN) - The Supreme Court on Monday agreed to decide the fate of an appeal brought by challengers accusing about a dozen banks of manipulating the London interbank offered rate (LIBOR).
Ellen Gelboim and Linda Zacher's case against Bank of America, Credit Suisse Group and others had been consolidated with similar lawsuits for pretrial purposes, but a federal judge in Manhattan dismissed Gelboim and Zacher's sole claim for relief, and therefore their complaint, with prejudice.
When Gelboim and Zacher tried to appeal, the 2nd Circuit found last year that it lacked jurisdiction because all of the other consolidated complaints had not been dismissed as well.
Gelboim and Zacher petitioned the Supreme Court to answer "whether consolidated cases retain their separate identity or become one case for purposes of appellate jurisdiction has divided the courts of appeals."
"This petition arises from litigation alleging that respondents manipulated the London Interbank Offered Rate ('LIBOR'), which is the most important benchmark for short-term interest rates in the United States and around the world," the petition states. "LIBOR ostensibly identifies banks' short-term borrowing costs. It is an essential financial term in countless financial instruments.
"The British Bankers Association (BBA) publishes LIBOR every day in ten currencies, including U.S. dollars. Various banks - respondents here - together provided the information that the BBA used to set the U.S. dollar LIBOR. It has been revealed, however, that respondents conspired to manipulate LIBOR by submitting false information. The respondents' collusion suppressed LIBOR, which directly suppressed the payments on LIBOR-linked financial instruments, including the interest paid to floating rate bondholders for the use of their money.
"Respondents' actions gave rise to a variety of suits by parties claiming that they were injured by the suppression of U.S. dollar LIBOR."
Per its custom, the U.S. Supreme Court did not issue any comment in taking up the case Monday.