Citibank, N.A. has asked a federal district court to bless its $23 million settlement in a class action lawsuit alleging a wide-ranging conspiracy among banks to fix yen-denominated London Interbank Offered Rates (LIBOR) interest rates between 2006 and 2010. The settlement is the first of its kind in the case. The lead plaintiff in the litigation, Jeffrey Laydon, urged the court to approve the settlement, with his counsel describing it as an “ice breaker” that could serve as a “potential catalyst” for other banks to settle.

In 2012, Mr. Laydon sued more than twenty financial institutions, alleging violations of the Commodity Exchange Act and Sherman Act, among others. In a 300 page complaint, he detailed an alleged conspiracy among banks that sit on LIBOR and Tokyo Interbank Offered Rate (TIBOR) panels of conspiring to fix these rates by submitting agreed-upon estimates. As a result of the defendants’ actions, Laydon claims that he suffered thousands of dollars of damages in connection with his shorting derivatives of Euroyen TIBOR futures contracts.

In 2014, the federal judge presiding over the case dismissed Mr. Laydon’s antitrust and unjust enrichment claims, finding that he did not allege sufficient facts to support those causes of action. The judge ruled that “plaintiff alleges only that he ‘initiated short positions in CME Euroyen TIBOR futures contracts during the class period and suffered net losses on such contracts due to the presence of artificial Euroyen TIBOR future prices proximately caused by defendants’ unlawful manipulation  and restraint of trade.'” However, Laydon “fail[ed] to plead facts to establish that this [was] or might [have been] anticompetitive.”

While the dismissal of the antitrust claims was a boon to the defendants, the judge also ruled that the plaintiff had pled sufficient facts to support his price manipulation and aiding and abetting causes of action. The judge found that Laydon sufficiently pled that “the banks stood to gain profits from the manipulations of yen-LIBOR and TIBOR rates, in the form of hundreds of millions in ill-gotten trading profits from Euroyen derivatives positions” and through his pleadings, the plaintiff presented “overwhelming factual content” from which a court could infer manipulative intent.

Fast forward two years, following countless hours of discovery and legal schisms, to the first of what promises to be multiple settlements between the lead plaintiff and defendants. Laydon’s counsel noted that the Citibank settlement “give[s] class members a bird in the hand and the opportunity to obtain the same bird in the bush through settlements or verdicts against the remaining defendants.” Only time will tell if the Citibank settlement truly breaks the ice in this litigation.

The case is Laydon v. Mizuho Bank Ltd., et al., Case Number 1:12-cv-03419, United States District Court, Southern District of New York.