British bank Barclays agreed to pay $20 million to settle a class-action suit from investors who lost money in the Libor interest rate-rigging conspiracy, according to a US court filing.
The banking giant also agreed to cooperate with plaintiffs as they seek damages against other large financial institutions over manipulation of the London Interbank Offered Rate, according to a filing Wednesday in a US district court in New York.
Kirby McInerney, which represents plaintiffs in the case, said the Barclays agreement could be an "ice-breaker" deal that encourages other firms to settle in the multinational rate-rigging case.
Defendants in the class-action lawsuit include Citigroup, Credit Suisse, JPMorgan Chase and HSBC.
Under the settlement with Barclays, which must be approved by a US court, plaintiffs agreed to drop the British bank from the suit in exchange for $19.98 million.
Barclays will also provide plaintiffs attorneys with direct communications on Libor between it and other financial institutions and with documents that show that Barclays was aware of the other banks` planned Libor submissions.
Plaintiffs have alleged that large banks involved in the Libor scandal made hundreds of millions, if not billions, of dollars in "ill-gotten gains" by suppressing borrowing rates of the critical Libor benchmark between 2005 and 2010.
Defendants "surreptitiously bilked" lenders, according to an April 2012 class-action complaint that listed 16 companies in the conspiracy.
The London Interbank Offered Rate (Libor) is the rate banks charge each other for short-term loans, and it underpins an estimated $300 trillion of transactions worldwide.