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Bluecrest LIBOR suit dismissed

First Published 28th September 2017

Former hedge fund was accused of helping to manipulate LIBOR

A judge in New York has this week dismissed a suit that accused Bluecrest, formerly a hedge fund and now a family office, of helping to manipulate Swiss franc (CHF) LIBOR in conjunction with a number of banks.

The suit had been brought by Sonterra Capital, a hedge fund that was based in New York and closed in 2012. The firm alleged that manipulation of CHF LIBOR by Credit Suisse, RBS and other defendants, including Bluecrest, had caused them to lose money on franc-denominated currency derivatives. The judge was sceptical, ruling that Sonterra "fails to state any claim for which relief can be granted". He did, however, allow the plaintiff to file an amended complaint, though there is no indication as to whether they will do so.

The case is notable because it was the first in which a hedge fund - rather than an investment bank or inter-bank broker - had been accused of manipulating LIBOR. The reason Bluecrest was implicated is likely because Christian Bittar, a high profile interest rate trader at Deutsche Bank, which was fined 2.5 billion USD for rigging LIBOR, went on to work at Bluecrest. He is currently on trial in London having plead not guilty to LIBOR manipulation.