A current lawsuit has emerged that is bringing to light many of the details regarding the continuing Libor rate fixing scandal. The scandal is a part of an interest rate manipulation that is being investigated within several of the world’s largest banking institutions. Barclays is among the banks that have been investigated for insider benchmark interest rate manipulations. A current court case against Barclays has indicated that insider interest rate changes were made in order to gain a significant monetary profit.

Barclays Fixing Allegations

Guardian Care Homes
A residential care home operator has brought this legal matter before an appeals court. Guardian Care Homes had taken out two large loans that included an interest rate swap product. The loans were for 70 million pounds, and the monetary loss from the interest rate swap products developed into a loss that was in the millions for the residential care home group. The care home has brought the matter before an appeals court indicating that a specific link exists between its own financial losses from the loan packages and the Libor manipulations that have been proven against Barclays.

Barclays Bank Fines
Barclays was fined $453 million by U.S. and British authorities for the insider Libor interest rate manipulations. The bank continues to be investigated because of the continuing lawsuits that have been launched against the financial institution.

Court Case Details
There have been recent court case details emerging that pinpoint more of the specific acts of fraud that were perpetuated during the Libor manipulation incidents from 2006 through 2010. The investigators have uncovered an employee email series that details certain financial requests that were sent to Barclays Bank. These requests ask that certain interest rates be artificially lowered to produce a significant profit for a hedge fund. The emails link back to the desk of a Barclays Bank employee and then go out to a second employee who uses the artificial data to gain monetary profits for an associated fund.

Barclays Response in Court
The attorneys for Barclays Bank have indicated that the interest rate products and the email discovery does not directly connect to the loan problem that Guardian Care Homes is alleging. Barclays attorneys are indicating that the loans are due and that the money owed for the interest rate products is valid.

Court of Appeals
A court of appeals panel of three judges has accepted this appeals case for review. There should be a decision about the legality of the lower court decision at the end of this year. Another case that is similar to the Barclays Bank case is being decided at the same time. This second case is from a real estate development company in India that is alleging a similar complaint about its loans and the bank. The real estate developer is Unitech.

Ramifications of the Appeals Court Decision
There can be important ramifications from the appeals court decision with this unique matter. The direct link between the interest rate swap packages and the original loan obligation is one important factor to be decided. There are many other loans that were originated during this period of time from 2006 through 2010, and these loans have interest rate swap products as well. The future pay back of these lending products is being determined. The loans are across several industries and are international in application.
The court of appeals is currently deciding the future of the loan contracts that are tainted by the Libor product scandal. The current court case is a test case that may have many ramifications. Consequences could affect lending products and pay back obligations on numerous loans still outstanding. Business futures are frequently tied to their lending products and current credit ability as well. The two industries involved, the health care industry and the real estate construction industry, can be affected by the outcome of the court decision

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Tim Capper reports on Financial Mis-Selling for Maple Leaf Financial. Our aim is to ensure you get honest advice and proper guidance to ensure a suitable recommendation can be made to pursue a financial claim

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Tim Capper

Bringing you financial news and information in plain english for Maple Leaf Financial. My aim is to help readers understand these often complex financial instruments.