The Libor scandal rocking the financial world has found its way to Alaska as a New York lawyer looks to represent disenfranchised investors from the Last Frontier, Reuters reports.
While the London Interbank Offered Rate -- nicknamed Libor -- may sound obscure, it is one of the most important numbers in the financial world.
Libor is a short-term interest rate that is that is supposed to reflect the cost of borrowing between banks. Eighteen major banks self-report their estimates to the British Bankers Association, and Thomson Reuters then compiles an average. The rate is then used to set the interest rates for hundreds of trillions of dollars worth of financial products, including mortgages and consumer loans (check out this handy guide to Libor).
In July, British bank Barclays was fined $450 million for manipulating the information used to set the rate, which allowed traders to profit from particular trades, and allowed the bank to profit as a whole.
Now, New York lawyer Brian Murray filed a lawsuit on behalf of investors in Alaska, as well as investors in over 20 other states, accusing banks of rigging Libor, and therefore violating various state antitrust laws. The Libor scandal has begun sparking massive litigation, and Murray’s lawsuits, which so far lack any Alaska plaintiffs, show how lawyers are filing in to get a piece of the pie.
Murray said he’s assuming Alaska plaintiffs will “find” him, and that he will have a representative when the battle for his class-action certification hits the courtroom. Read much, much more.