Rhino Enterprises Ltd., the England-based parent company of the Squirrel Self Storage brand, has filed a lawsuit against Barclays Banking Group that accuses the lender of falsifying submissions and colluding with other banks in rigging the Libor interest-rate benchmark. The multi-million dollar lawsuit is the latest connected to the Libor-rigging scandal from 2012, which revealed banks had manipulated the Libor in their favor dating to at least 1991.
Libor, an abbreviation for London Interbank Offered Rate, is the interest rate international banks charge for short-term loans to each other. It’s calculated daily and used as a benchmark in setting the rates on trillions of dollars worth of commercial and consumer loans, derivatives and other financial products around the world, according to “Forbes.”
“Because of the large notional amount of derivatives and loans that banks hold, even minuscule changes in the Libor rate can equate to millions of dollars worth of profits or losses,” according to a Forbes report. “A Barclays trader’s instant messages that surfaced during the Libor-scandal investigations showed that traders could earn ‘about a couple of million dollars’ for every .01 percent that Libor was manipulated in their favor.”
The Rhino lawsuit is among the first cases to allege that lenders colluded with each other to create a false market, according to a report by “The Independent.” “Barclays was knowingly participating with other banks in making false Libor submissions in all key currencies, including sterling,” according to the filing made in High Court in London. “The purpose and/or motive varied from time to time, but the effect of the false submissions was to render the rates unreliable, if not meaningless, and to undermine the integrity of Libor as a benchmark.”
Barclays has already paid £290 million to U.S. and U.K. regulators for manipulating the benchmark rate, according to the source. It’s among several banks caught up in the Libor scandal to be fined or make settlements outside of court. In April, Deutsche Bank AG paid a record $2.5 billion settlement for its involvement in the fixing scandal. Swiss bank UBS AG has paid $1.5 billion in penalties, and U.K. institutions Lloyds Banking Group PLC and Royal Bank of Scotland have also been fined or negotiated settlements, the source reported.
Squirrel Self Storage operates facilities in Birmingham and Leeds, England.
