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Hefty fines: Cleary, Slaughters and CC advise on banks’ €1.7bn rate-rigging settlement

A collection of some of Europe’s strongest antitrust practices have been advising some of the world’s largest global banks as they today (4 December) agreed fines with the European Commission for their participation in illegal cartels to rig interest rates.

Cleary Gottlieb Steen & Hamilton, Slaughter and May and Clifford Chance were among the law firms advising a total of eight international financial institutions – including the Royal Bank of Scotland, Deutsche Bank, JPMorgan, and Citigroup – who have been fined a total of €1.7bn for their roles in the cartels.

Four of the institutions participated in a cartel relating to interest rate derivatives denominated in the euro currency while six participated in one or more bilateral cartels relating to interest rate derivatives denominated in Japanese yen. As is standard procedure for competition investigations, the companies’ fines were reduced by 10% for agreeing to settle.

Barclays, advised by Clifford Chance’s competition partners Elizabeth Morony and Oliver Bretz, escaped a fine in its entirety for revealing the existence of the euro cartel, avoiding a total pay-out of €690m for its participation in the infringement.

UBS, advised by Gibson Dunn & Crutcher‘s City disputes head Philip Rocher alongside Brussels-based David Wood, also received full immunity for revealing the existence of the cartels, avoiding an estimated fine of €2.5bn for its participation in five of the seven infringements.

Meanwhile, the Brussels-based Cleary team advising Citigroup, which received the lowest fine of £58m (€70m), was led by EU competition partner Robbert Snelders.

King & Wood Mallesons SJ Berwin‘s City-based partner Tom Usher was by instructed RBS as the firm advised the bank on its competition breaches leading to a £325m (€391m) settlement with the EC.

Elsewhere, Magic Circle firm Slaughter and May had competition litigation head Michael Rowe and head of disputes Deborah Finkler act for Deutsche Bank, which was levied the highest sanction out of all the banks worth £600m (£724m).

Pinsent Masons‘ senior competition partner Alan Davis advised broker RP Martin, which was fined £205,000.

According to the BBC, banks that have not yet settled fines but are being investigated include HSBC and Credit Agricole, as well as JPMorgan, which accepted a fine for rigging in one market but not another.

Speaking in relation to the settlement, the Commission’s vice-president in charge of competition policy Joaquín Almunia, said: ‘What is shocking about the Libor and Euribor scandals is not only the manipulation of benchmarks, which is being tackled by financial regulators worldwide, but also the collusion between banks who are supposed to be competing with each other. Today’s decision sends a clear message that the Commission is determined to fight and sanction these cartels in the financial sector. Healthy competition and transparency are crucial for financial markets to work properly, at the service of the real economy rather than the interests of a few.’