By Toby Harnden


Resigned: American Barclays Chief Executive Bob Diamond has quit over the scandal

Resigned: American Barclays Chief Executive Bob Diamond has quit over the scandal

An American lawyer leading a class action suit in the United States has said that Barclays and other banks accused of rigging the Libor lending rate could be liable for hundreds of billions of dollars in damages.

‘There are thousands if not tens of thousands of entities that could possibly have a claim,’ said Michael Hausfeld, whose Washington-based firm Hausfeld LLP is co-leading the anti-trust class action case against 21 financial institutions.

His firm is receiving ‘inquiries on an hourly basis’ from potential plaintiffs seeking to join the 33 individuals and companies named in the class action, which was filed in New York in April.

Hausfeld LLP is also poised to launch legal actions in Asia and Europe, including the UK.

The New York suit states that the institutions named ‘and their co-conspirators engaged in a continuing agreement, understanding, or conspiracy in restraint of trade to artificially fix, maintain, suppress and stabilize Libor and thus the prices and rates of return on Libor-based derivatives sold by them’.

In an interview with MailOnline, Hausfeld said: ‘The total aggregate [of transactions] would be approximately in the trillions of dollars. Small movements in the base’s points could produce millions if not tens of millions or billions of dollars in damage.’

He described the resignation of Barclays chief executive Bob Diamond on Tuesday as ‘a sign of the egregiousness of the conduct that occurred under his watch’. The record $451.4 million penalties imposed by regulators in Britain and the US last week represented ‘a game changer’, he said.

‘Basically it's foreclosing the participating banks from denying they engaged in any wrongful activity. It clearly is well demonstrated that there is almost a fanciful attitude on the part of the traders in terms of dealing with financial instruments and corrupting market integrity.’

In striking a deal with the US Department of Justice to admit wrongdoing, Barclays ensured it would not be prosecuted in return for cooperating with the ongoing criminal investigation into other banks and individual one-time Barclays employees, some 14 of whom are being scrutinised by the FBI.

‘It underscores the old adage that there may not be honour among thieves. Barclays had the ability to make a good deal for itself…Historically, those entities that exit early in criminal proceedings do better than those that linger,’ Hausfeld said.

Claims: Hausfeld said that Barclays and other banks accused of rigging the Libor lending rate could be liable for billions of dollars in damages (file photo)

Claims: Hausfeld said that Barclays and other banks accused of rigging the Libor lending rate could be liable for billions of dollars in damages (file photo)

The US Commodity Futures Trading Commission (CFTC) agency is understood to have started investigating Libor rates in May 2008. Concerns were then heightened during the global financial crisis the following autumn when the rate rose sharply due to stresses in the banking system and then dropped back suspiciously.

In spring 2010 the CFTC, which had by then been contacted by a whistleblower, brought in the UK’s Financial Services Authority (FSA) and presented it with powerful evidence of manipulation.

Since then, the investigation has pulled in nearly a dozen regulators and more than 20 banks and brokerage firms across three continents. With civil litigation in the US gathering steam, current and former US regulatory officials said that extraditions and criminal prosecutions were likely.

‘Extraditions are certainly a possibility if the Department of Justice [DoJ] isn’t done yet,’ a former US government regulatory official said. ‘The CFTC and SEC [Securities and Exchange Commission] are part of the civil authorities. They sue people, fine them and seize assets. The DoJ is criminal so they arrest people and throw them in jail.’

Suit: Michael Hausfeld (pictured) has a firm Hausfeld LLP that is co-leading the anti-trust class action case against 21 financial institutions

Suit: Michael Hausfeld (pictured) has a firm Hausfeld LLP that is co-leading the anti-trust class action case against 21 financial institutions

Professor William Black of the University of Missouri-Kansas City, author of ‘The Best Way to Rob a Bank is to Own One’, said US litigation could be the ‘biggest thing in the history of anti-trust by orders of magnitude’ and punitive damages ‘could bring down any British bank because Americans are big enough players’.

The scale of the alleged conspiracy to fix the rates raise the prospects of top Barclays officers and senior figures from other banks being tried in high-profile ‘white collar crime’ cases in which they are held up as personifications of the avaricious excesses of Wall Street and the City of London.

Black said that the US remained ‘tougher against elites than anybody else in the world’, noting the 1,000 felony convictions in the Savings & Loans scandal in the 1980s and 1990s and the 60 connected to Enron in the following decade.

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Does anyone believe that this is the last exposure about Bankers misdemeanour's we will get to hear about? I know of a least one other where Banking/Mortgage companies are failing to adhere to Statute Law requirements for the issue of a valid mortgage & have been for years. County Courts are issuing possession orders ignoring Statute Law throwing families on to the street without any validity in the decision. An absolute disgrace! There is Case Law supporting the appeals by certain individuals overturning the CC's decisions but more adherence is necessary. Even Cousins Law on Mortgage & Chitty on Contracts state the legal requirements for a valid mortgage but the information is being totally ignored by Banks/Mortgage companies. The banks are getting away with theft. Once this comes out it will make the LIBOR controversy small fry & the banks, as most of them own the Mortgage Companies, will be making more excuses to prop themselves up.

If our Bob D has any information on collusion between Treasury or ministerial officials. I hope he's got the balls to spit it out. And remember as the riots start in protest of the clowns that run the rip off businesses. the authorities will probably be arresting and imprisoning any body that argues?? Dare you smash that window of some one that has just ripped of the tax payer and small savers for millions of hard earned cash. Go Yanks for the throat !! nobody over here has nuts to bother about it.

Banks do not have money of their own. They have money they are managing for their customers. So now the lawyers are shoving their noses in the trough to take more of the bank customers' money and claiming they are the good guys?? The only thing that makes sense is criminal charges, litigation and actions against the bank directors, managers and traders that were involved in this. Suing 'a Bank' is just taking the bank's customers' money AGAIN.

Well thats just dandy and exactly what we don't need as we the taxpayer will end up footing the bill again if the banks can't afford billions in lawsuites. The government needs to put some protection in place against greed from the US which will become a free feed and run out of control, asset stripping our financial industry and with that will come a triple dip recession from which we may never recover.

You won't get anything out of our banks in the UK....the bankers got there before you.

Don't worry this is just hype. The ONLY people who will make any money out of this are Lawyers.

The Banksters have medt their match: The Lawyers! The lawyers always win and they will extract fees that will be many times larger than Diamond and his bankster cronies have pocketed by way of "bonuses" (skimming). This is one helluva big mess this time and my betting is that it will bring the whole financial system down. This in turn will lead to a "fix it" personality rising up to put the world back in order. Please allow me to introduce myself, I'm a man of wealth and taste... : 0

Before everyone starts cheering remember that 99% of the cash in banks belongs to you the depositors and that cash is what this shyster and his dumb clients are after dippi9ng their snouts into!

I think what angers me most is the fact that the execs will get "golden parachute's." They're paid enormous salaries because they're expected to take on an enormous job..yet when they fail they still are rewarded. If one takes a job with such high benefits, they need to be accountable and accept the financial consequences when they fail. They need to face "real" prison with armed robbers, because as far as I am concerned they're at the same level.

There is Irony to this. After all of the damage the banks have done to economies across the world with their reckless gambles and outrageous bonus plans it's the Lawyers who may bring them to book. The irony of course is that the Lawyers are bigger thieving liars than even the bankers.

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