ISDAfix Antitrust Litigation

BASIC INFORMATION ABOUT THE NEWLY APPROVED SETTLEMENT

1. Why did I get a Notice for the Newly Approved Settlement?

   You received a Notice for the Newly Approved Settlement because you requested it or because records indicate that you may be a member of the Settlement Class in this Action because you may have entered into, received or made payments on, settled, terminated, transacted in, or held an eligible ISDAfix Instrument between January 1, 2006 and January 31, 2014. The term ISDAfix Instrument is defined in FAQ 6.

   The Court held a Fairness Hearing as to the Newly Approved Settlement on November 8, 2018, and granted Final Approval of the Newly Approved Settlement on November 13, 2018. The claims administrator appointed by the Court will make the payments that the Settlement allows. The Notice for the Proposed Settlement, now referenced herein as the Newly Approved Settlement, explains the litigation, the Newly Approved Settlement, your legal rights, what benefits are available, who is eligible for them, and how to get them.

   If you have received a Notice for the Proposed Settlement, now referenced herein as the Newly Approved Settlement, but the eligible trades covered by it (as discussed below) were executed on behalf of the ultimate beneficiary(ies), please send the Notice and any accompanying documents to the ultimate beneficiary(ies), or provide a list of the names and addresses of the ultimate beneficary(ies) to the Claims Administrator so that they may do so. If you need help, please contact the Claims Administrator.

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2. What is this litigation about?

   The lawsuit alleges that the Defendants, including the Newly Settling Defendants, engaged in anticompetitive acts that affected the market for ISDAfix Instruments in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. The lawsuit also alleges that Defendants were unjustly enriched under common law, and breached ISDA Master Agreements, by their anticompetitive acts. The lawsuit was brought by, and on behalf of, certain Persons who transacted in ISDAfix Instruments. All Defendants deny they did anything wrong.

   The Court supervising the case is the United States District Court for the Southern District of New York. The case is called Alaska Electrical Pension Fund, et al. v. Bank of America, N.A., et al., 14-cv-7126 (JMF).

   The entities that are prosecuting this lawsuit, referred to as “Class Plaintiffs,” are Alaska Electrical Pension Fund; Erste Abwicklungsanstalt; Genesee County Employees’ Retirement System; Pennsylvania Turnpike Commission; Portigon AG; City of New Britain, Connecticut; County of Montgomery, Pennsylvania; and County of Washington, Pennsylvania.

   Class Plaintiffs allege, among other things, that Defendants, including the Newly Settling Defendants, colluded to manipulate USD “ISDAfix,” a global benchmark reference rate used in the interest rate derivatives market. Class Plaintiffs allege Defendants include 14 banks that dominate the market for interest rate derivatives, as well as interdealer broker ICAP, which administered the ISDAfix-setting process during the Class Period. In general, Class Plaintiffs allege Defendants rigged the ISDAfix rates to secure supra-competitive profits on their derivative positions.

   Class Plaintiffs allege that, during the Class Period, ISDAfix rates were set and published daily for various currencies and maturities through a two-step process managed by Newly Settling Defendant ICAP. According to Class Plaintiffs, the rates were designed to represent the current mid-market rate, at a specific time of day, for the fixed leg of standard fixed-for-floating interest rate swap. First, beginning at 11:00 a.m., ICAP calculated “reference rates” that were designed to reflect ICAP’s estimate of the average trading rate of USD interest rate swaps at that time. Second, ICAP circulated the reference rates to the defendant banks, polled each of them as to their actual bid/offer spreads, and then used the responses to calculate published ISDAfix rates.

   Class Plaintiffs further allege Defendants, including the Newly Settling Defendants, manipulated both steps of this USD ISDAfix rate-setting process throughout the Settlement Class Period. Class Plaintiffs allege Defendants first executed transactions for the purpose of impacting the reference rate, and then acted on their agreement to not submit their actual, respective rates—but rather, to accept the ICAP reference rate regardless of whether it matched their true bid/offer spreads. Class Plaintiffs also allege the bank Defendants ultimately made the same submissions nearly every day for multiple years, which is a statistical impossibility.

   As a result of Newly Settling Defendants’ alleged misconduct, Class Plaintiffs allege the Newly Settling Defendants caused them (and others) harm. For instance, but without limitation, they allege that transactions with payments linked to ISDAfix rates would have been impacted if ISDAfix rates were set at artificial levels. And they allege that other transactions (e.g., swaps) would have been impacted through the effect that the manipulation had on the pricing of those instruments.

   As mentioned above, Newly Settling Defendants deny they engaged in any wrongdoing.

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3. Why is this a class action?

   A class action is a lawsuit in which a few representative plaintiffs bring claims on behalf of themselves and other similarly situated persons (i.e., the class) who have similar claims against the defendants. The plaintiffs, the Court, and counsel appointed to represent the class all have a responsibility to make sure that the interests of all class members are adequately represented.

   Importantly, class members are NOT individually responsible for the fees or litigation expenses of Court-appointed counsel. In a class action, attorneys’ fees and litigation expenses are typically paid from the settlement fund (or the Court judgment amount), and must be approved by the Court. If there is no recovery, the attorneys do not get paid.

   When a class plaintiff enters into a settlement, such as the Newly Approved Settlement with the Newly Settling Defendants here, the Court will require that the members of the class be given notice of the settlement and an opportunity to be heard. The Court then holds a hearing to determine, among other things, if the settlement is fair, reasonable, and adequate to the members of the class.

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4. Why is there a Newly Approved Settlement?

   The Court did not decide in favor of Class Plaintiffs or the Newly Settling Defendants. Class Plaintiffs and Class Counsel thoroughly investigated the facts and law regarding the claims at issue in this litigation, as well as the Newly Settling Defendants’ potential defenses. As a result of this investigation, Class Plaintiffs believe they could have won substantial damages at trial. Newly Settling Defendants believe Class Plaintiffs’ claims lack merit, and believe the claims would have been rejected either prior to trial, at trial, or on appeal. Newly Settling Defendants believe the trial court or an appellate court would have prevented Class Plaintiffs from litigating the case as a class action. Newly Settling Defendants do not believe Class Plaintiffs could have ever proven any damages to the Settlement Class, in which case the Settlement Class would receive nothing.

   None of those disputed issues were decided with respect to claims against the Newly Settling Defendants. Instead, after engaging in lengthy, detailed, arm’s-length negotiations, Class Plaintiffs and the Newly Settling Defendants agreed to settle the case. Newly Settling Defendants have agreed to pay a total of $96 million (the “Settlement Fund”) to settle the case. This Proposed Settlement is now approved, both sides will avoid the cost and risk of adverse outcomes before or after trial or on appeal, and Settlement Class Members who submit valid Claim Forms will get compensation. Class Plaintiffs and their Class Counsel think the Newly Approved Settlement is best for all Settlement Class Members.

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WHO CAN PARTICIPATE IN THE NEWLY APPROVED SETTLEMENT?

5. How do I know if I am part of the Newly Approved Settlement?

   The Court has approved the certification of the Settlement Class consisting of the following:

   All Persons or entities who entered into, received or made payments on, settled, terminated, transacted in, or held an ISDAfix Instrument during the Settlement Class Period. Excluded from the Settlement Class are Defendants and their employees, affiliates, parents, subsidiaries, and co-conspirators, should any exist, whether or not named in the Amended Complaint, and the United States Government, and all of the Released Defendant Parties, provided, however, that Investment Vehicles shall not be excluded from the definition of the Settlement Class.

   The Settlement Class Period is January 1, 2006, to January 31, 2014. If you have received the Notice for the Proposed Settlement, now referenced herein as the Newly Approved Settlement, but the eligible trades were executed on behalf of the ultimate beneficiary(ies), please send the Notice for the Newly Approved Settlement and any accompanying documents to the ultimate beneficiary(ies), or provide the name and address of those ultimate beneficary(ies) to the Claims Administrator so that they may do so. If you need help, please contact the Claims Administrator.

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6. Which ISDAfix Instruments are covered by the Newly Approved Settlement?

   The Settlement relates to USD ISDAfix instruments, which include, but are not limited to, the following:

   • Any of the following where denominated in USD or related to USD interest rates: swaps, swap spreads, swap futures, variance swaps, volatility swaps, range accrual swaps, constant maturity swaps, constant maturity swap options, digital options, cash-settled swaptions, physically-settled swaptions, swapnote futures, cash-settled swap futures, steepeners, flatteners, inverse floaters, snowballs, interest rate-linked structured notes, and digital and callable range accrual notes.
   • Any other financial instrument, product, or transaction related in any way to any ISDAfix Benchmark Rates, including, but not limited to, any instruments, products, or transactions that reference ISDAfix Benchmark Rates and any instruments, products, or transactions relevant to the determination or calculation of ISDAfix Benchmark Rates.

   ISDAfix Benchmark Rates are defined as any and all tenors of USD ISDAfix, including any and all USD ISDAfix rates and USD ISDAfix spreads, and any and all “reference rates” distributed as part of the USD ISDAfix submission process.

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7. Are there exceptions to being included in the Settlement Class?

   Yes. You are not included in the Settlement Class if you are the following: a Defendant, their employees, affiliates, parents, subsidiary of a Defendant, or a past or present direct and indirect parent (including holding companies), subsidiary, affiliate, associate (all as defined in SEC Rule 12b-2 promulgated pursuant to the Securities Exchange Act of 1934), division, joint venture, predecessor, successor, acquirer, agent, attorney, legal or other representative, insurer (including reinsurers and co-insurers), assign, assignee, or a current and former employee, officer, or director of a Newly Settling Defendant. Also excluded is any Person whose exclusion is otherwise mandated by law.

   However, “Investment Vehicles” are not excluded from the Settlement Class. For purposes of the Settlement, an Investment Vehicle means any investment company or pooled investment fund, including, but not limited to, the following: (i) mutual fund families, exchange-traded funds, fund of funds and hedge funds, in which a Defendant has or may have a direct or indirect interest, or as to which its affiliates may act as an investment advisor, but of which a Defendant or its respective affiliates are not a majority owner or do not hold a majority beneficial interest; and (ii) any Employee Benefit Plan as to which a Defendant or its affiliates act as an investment advisor or otherwise may be a fiduciary.

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8. What if I’m still not sure if I am included in the Settlement Class?

   If you are still not sure whether you are included in the Settlement Class, you can ask for free help. Call 1-844-789-6862 (U.S.) or; +1-503-597-5526 (Int.) for more information. You may also email the Claims Administrator at info@ISDAfixAntitrustSettlement.com.

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THE BENEFITS OF THE NEWLY APPROVED SETTLEMENT

9. What does the Newly Approved Settlement provide?

   Newly Settling Defendants will collectively pay the Settlement Class $96 million. The $96 million settlement fund, plus interest earned, and less taxes, any costs associated with notifying the Settlement Class, claims administration, and Court-awarded attorneys’ fees, expenses, and incentive awards to Class Plaintiffs, will be divided among all Settlement Class Members who sent in a timely and valid claim form for the Approved Settlements (and who did not opt out of this Newly Approved Settlement), or who send in a timely and valid claim form for the Newly Approved Settlement. Please refer to FAQ 11 and FAQ 12 below on how to receive a payment.

   Newly Settling Defendants have agreed to contribute to the $96 million settlement fund as follows:

   BNP Paribas	$33,500,000
   ICAP Capital Markets, LLC	$11,500,000
   Morgan Stanley & Co., LLC	$33,500,000
   Nomura Securities International, Inc.	$8,750,000
   Wells Fargo Bank, N.A.	$8,750,000

   Certain rights, including termination or reduction rights, are set in proportion to these contributions. Please refer to the Settlement Agreement reached as part of the Newly Approved Settlement for full details.

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10. Can the Settlement Amount be reduced or the Newly Approved Settlement be terminated?

    Because the Court has given final approval to the Newly Approved Settlement, the Settlement amount from the Newly Approved Settlement cannot now be reduced, and the Newly Approved Settlement cannot now be terminated.

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11. Will I get a payment?

    On February 26, 2020, the Court entered an Order authorizing the distribution of the Net Settlement Funds to Authorized Claimants. The initial distribution of the settlement funds took place in March and April 2020. A second distribution of settlement funds was made in October 2021.

    The second distribution disbursed the amount remaining in the Net Settlement Funds (including the reserve and any funds from void stale-dated, or returned checks) and after deducting any further fees and expenses, to all Authorized Claimants from the initial distribution who (a) did not receive the Alternative Minimum Payment; (b) cashed their first distribution payments and, (c) who were entitled to more than $100 from such redistribution based on their pro rata share of the remaining funds.

    The deadline to submit a claim form in connection with the Newly Approved Settlement was December 23, 2018.

    Claims that were valid and submitted after the October 31, 2018 claims filing deadline in the Approved Settlements, but before or on the January 31, 2019 claims filing deadline in the Newly Approved Settlement, received payment from the Newly Approved Settlements Fund only.

    Authorized Claimants whose total estimated compensation calculated to $100 or less received an Alternative Minimum Payment of $100 and are considered paid in full and not eligible for any supplemental distributions, as approved by the Court in the Plans of Distribution.

    Authorized Claimants that qualified for a pro rata distribution received payment from Newly Approved Settlement fund if a valid claim was submitted after the October 31, 2018 claims filing deadline in the Approved Settlements, but before or on the January 31, 2019 claims fling deadline in the Newly Approved Settlement. Pursuant to the Distribution Order, pro rata distributions were subject to an 8% holdback, which was held in reserve for use in any supplemental distributions.

    The amount of your pro rata payment was determined by the Plan of Distribution that the Court granted final approval of on November 13, 2018. The Plan of Distribution allocated the Net Settlement Fund into two pools (“A” and “B”).

    Pool A encompasses ISDAfix Instruments that were directly linked to one or more ISDAfix rates. Pool B will consist of all other ISDAfix Instruments. Pool B’s allocation will be further divided among four subgroups. Pool B.1 encompasses fixed-for-floating interest rate swaps where the floating leg references USD LIBOR as well as the set of interest rate derivatives that provide for the delivery, upon prespecified conditions, of such interest rate swaps. Pool B.2 encompasses Treasury-fixed income securities or any derivative that allows for delivery of such a Treasury security such as a Treasury futures contract. Pool B.3 encompasses Eurodollar futures contracts or any derivative that provides for delivery of a Eurodollar futures contract such as Eurodollar options. Pool B.4 consists of any ISDAfix Instrument that does not fit into any of the above categories.

    Each transaction will only form the basis for a claim against the portion of the Newly Approved Settlement Fund assigned to the same pool and subgroup to which that transaction is assigned. The Plan of Distribution assigns relative weights to each eligible transaction based on the following: (a) the amount of money on which the interest payments are based for the transaction (the “Transaction Notional Amount”); (b) the economic sensitivity of the transaction to ISDAfix rates and market swap rates (the “Economic Multiplier”); and (c) the relative degree of risk that claims arising out of that type of transaction may have faced at trial (the “Litigation Multiplier”). The Transaction Claim Amount for a given transaction is thus calculated as Transaction Claim Amount = Transaction Notional Amount x Economic Multiplier x Litigation Multiplier.

    Distributions from each pool/subgroup will be made on a pro rata basis after such weighting is complete. For example, your recovery for all your transactions assigned to Pool A is calculated as (a) the amount of the Newly Approved Settlement Fund for Pool A multiplied by (b) the ratio of all your Pool A Transaction Claim Amounts as compared to the total of all Settlement Class Members’ Pool A Transaction Claim Amounts.

    For more details regarding the Plan of Distribution and the settlement process, you may contact the Claims Administrator at 1-844-789-6862 (U.S.) or +1-503-597-5526 (Int.). You may also write to the Claims Administrator at info@ISDAfixAntitrustSettlement.com.

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12. How can I get a payment?

    On February 26, 2020, the Court entered an Order authorizing the distribution of the Net Settlement Funds to Authorized Claimants. Initial distribution payments were sent to eligible Settlement Class Members in March 2020 and April 2020. Second distribution payments for eligible Settlement Class Members were sent in October 2021.

    The second distribution disbursed the amount remaining in the Net Settlement Funds (including the reserve and any funds from void stale-dated, or returned checks) and after deducting any further fees and expenses, to all Authorized Claimants from the initial distribution who (a) did not receive the Alternative Minimum Payment; (b) cashed their first distribution payments and, (c) who were entitled to more than $100 from such redistribution based on their pro rata share of the remaining funds.

    The deadline to submit a claim form in connection with the Newly Approved Settlement was December 23, 2018.

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13. When will I receive a payment?

    On February 26, 2020, the Court entered an Order granting authorization to distribute the Net Settlement Funds to Authorized Claimants. Click here to view the February 26, 2020 Order.

    Initial distribution payments were sent to eligible Settlement Class Members in March 2020 and April 2020. Second distribution payments for eligible Settlement Class Members that met the requirements in accordance with the Court–approved Plans of Distribution were sent in October 2021.

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14. What am I giving up to get a payment or stay in the Settlement Class?

    Unless you exclude yourself, you are staying in the Settlement Class, and that means you cannot sue, continue to sue, or be part of any other lawsuit against the Newly Settling Defendants or the Released Defendant Parties about the legal issues in this case. It also means that all of the Court’s orders will apply to you and legally bind you. As described in the Settlement Agreement, upon the Effective Date of the Settlement, each of the Releasing Class Parties: (i) shall be deemed to have, and by operation of the Final Judgment and Order of Dismissal shall have, fully, finally, and forever waived, released, relinquished, and discharged to the fullest extent permitted by law all Released Claims against the Released Defendant Parties, regardless of whether such Releasing Class Party executes and delivers a Claim Form; (ii) shall forever be enjoined from prosecuting in any forum any Released Claim against any of the Released Defendant Parties; and (iii) agrees and covenants not to sue any of the Released Defendant Parties with respect to any Released Claims or to assist any third party in commencing or maintaining any suit against any Released Defendant Party related in any way to any Released Claims. The capitalized terms used in this paragraph are defined in the Settlement Agreement reached with the Newly Settling Defendants.

    A full description of the claims you are giving up against the Newly Settling Defendants and the Released Parties is set forth in the Settlement Agreement at Paragraph 7, which may be obtained here, or by contacting the Claims Administrator at 1-844-789-6862 (U.S.) or +1-503-597-5526 (Int.). You may also email the Claims Administrator at info@ISDAfixAntitrustSettlement.com. Unless you exclude yourself, you are “releasing” the claims described in the Settlement Agreement, whether or not you later submit a claim.

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EXCLUDING YOURSELF FROM THE NEWLY APPROVED SETTLEMENT

15. What if I do not want to be in the Settlement Class?

    The deadline to exclude yourself from, or “opt out” of, the Newly Approved Settlement was October 13, 2018.

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16. How do I get out of the Newly Approved Settlement?

    The deadline to exclude yourself from, or “opt out” of, the Newly Approved Settlement was October 13, 2018.

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17. If I exclude myself, can I get money from the Newly Approved Settlement?

    No. You will not get any monetary benefits from the Newly Approved Settlement if you excluded yourself from this Settlement Class.

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18. If I exclude myself, can I comment on the Newly Approved Settlement?

    No. If you excluded yourself, you are no longer a member of the Settlement Class, and may not comment on or object to any aspect of the Newly Approved Settlement.

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COMMENTING ON OR OBJECTING TO THE NEWLY APPROVED SETTLEMENT

19. How can I tell the Court what I think about the Newly Approved Settlement?

    The deadline to comment or object to the Newly Approved Settlement was October 13, 2018.

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20. What’s the difference between objecting and excluding?

    Objecting is simply telling the Court that you do not like something about the Newly Approved Settlement. You can object only if you stay in the Settlement Class. Excluding yourself is telling the Court that you do not want to be part of the Proposed Settlement Class as it relates to the Newly Approved Settlement. If you exclude yourself, you have no basis to object because the Newly Approved Settlement no longer affects you.

    The deadline to opt out, or comment, or object to the Newly Approved Settlement was October 13, 2018.

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THE LAWYERS REPRESENTING YOU

21. Do I have a lawyer in this case?

    Yes. The Court has appointed the three lawyers listed below to represent you and the Settlement Class:

    Daniel L. Brockett Quinn Emanuel Urquhart & Sullivan, LLP 51 Madison Avenue 22nd Floor New York, NY 10010

    David W. Mitchell Robbins Geller Rudman & Dowd, LLP 655 West Broadway Suite 1900 San Diego, CA 92101

    Christopher M. Burke Scott+Scott, Attorneys at Law, LLP 600 West Broadway Suite 3300 San Diego, CA 92101

    
    

    These lawyers are called Class Counsel. Class Counsel will apply to the Court for payment of attorneys’ fees and expenses from the settlement fund. You will not otherwise be charged for Class Counsel’s services. If you want to be represented by your own lawyer, you may hire one at your own expense.

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22. How will the lawyers be paid?

    Any attorneys’ fees and costs will be awarded only as approved by the Court in amounts determined to be fair and reasonable. The Settlement Agreement as to the Newly Settling Defendants provides that Class Counsel may apply to the Court for an award of attorneys’ fees and costs out of the Settlement Fund. Prior to the final approval hearing, Class Counsel moved for an award of attorneys’ fees, not to exceed 30% of the $96 million settlement fund; payment of litigation costs; and interest on such attorneys’ fees and costs at the same rate as the earnings in the settlement fund, accruing from the inception of the settlement fund until the attorneys’ fees and costs are paid. Class Plaintiffs also sought incentive awards because of their unique efforts and expense taken on behalf of the Settlement Class. The motion by Class Counsel for attorneys’ fees and costs, and any incentive awards, was filed on September 28, 2018, and is available here.

    The Court took Class Counsel’s requests for attorneys’ fees, expenses, and any incentive awards, under submission following the Fairness Hearing held on November 8, 2018.

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THE COURT’S FAIRNESS HEARING AS TO THE NEWLY APPROVED SETTLEMENT

23. When and where will the Court decide whether to approve the Proposed Settlement (also referenced herein as the Newly Approved Settlement)?

    The Court held a Fairness Hearing on November 8, 2018, and granted Final Approval of the Newly Approved Settlement on November 13, 2018.

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IF YOU DO NOTHING

24. What happens if I do nothing?

    As discussed in response to FAQ 11, if you submitted a timely and valid claim form in connection with the Approved Settlements, doing nothing will result in the Claims Administrator treating you as if you also submitted a timely and valid claim form in connection with this Newly Approved Settlement. You will get paid your share of the $96 million Settlement Fund.

    If you did not submit a timely and valid claim form in connection with the Approved Settlements, and do nothing here, you will not get any money from the Newly Approved Settlement.

    If you did not exclude yourself from the Newly Approved Settlement, you will not be able to bring a lawsuit, continue with a lawsuit, or be part of any other lawsuit against Newly Settling Defendants or the Released Defendant Parties about the legal issues in this case.

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GETTING MORE INFORMATION ABOUT THE NEWLY APPROVED SETTLEMENT

25. How do I get more information?

    The Notice summarizes the Newly Approved Settlement (referenced to therein as the "Proposed Settlement"). More details are available in the Settlement Agreement as to the Newly Settling Defendants. You can get complete copies of the Settlement Agreement here.

    You also may contact the Claims Administrator at 1-844-789-6862 (U.S.), +1-503-597-5526 (Int.), by email at info@ISDAfixAntitrustSettlement.com, or at the following mailing address:

    Alaska Electrical Pension Fund v. Bank of America, N.A.
    c/o Epiq
    P.O. Box 3775
    Portland, OR 97208-3775
    U.S.A.
    

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NO IMPACT ON THE APPROVED SETTLEMENTS

26. Does any of this change the deadlines or other terms governing the Approved Settlements?

    No. The Approved Settlements have already received final approval from the Court. The deadline to object to or opt out of the Approved Settlements has passed. The claims submission deadline for the Approved Settlements was July 16, 2018. However, Class Counsel have some discretion to allow late-filed claims in connection with the Approved Settlements. They have committed to exercise that discretion under certain circumstances. See FAQ 11.

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