Securities Regulation Daily Wrap Up, BROKER-DEALERS—S.D.N.Y.: Court rules LIBOR manipulation claims against UBS lack Article III standing, (Sep 30, 2025)

By Suzanne Cosgrove

The action is one of several that alleged certain financial institutions colluded to artificially impact benchmark interest rates for various currencies.

A U.S. District Court Monday granted UBS AG’s motion to dismiss an amended complaint brought by Sonterra Capital Master Fund Ltd. in a long-running dispute in which the plaintiffs claimed that a group of banks and brokers violated federal antitrust and RICO laws by manipulating the Swiss Franc London Interbank Offer Rate, known as CHF LIBOR (Sonterra Capital Master Fund Ltd. v. Credit Suisse Group AG, No.1:15-cv-00871-SHS (S.D.N.Y. Sept. 29, 2025)).

Parties involved. The plaintiffs in the case include Fund Liquidation Holdings LLC, which alleges that it is the successor-in-interest to Sonterra Capital Master Fund Ltd., several entities associated with FrontPoint European Fund, L.P. and several entities associated with Hunter Global Investors Fund I, L.P., Richard Dennis, and the California State Teachers’ Retirement System (CalSTRS).

The moving defendants are the broker defendants and UBS AG. All defendants except UBS have settled this litigation, and plaintiff CalSTRS does not assert any claims against UBS.

Background. The original complaint in this action was filed in 2015, as was the first amended complaint which added plaintiffs FrontPoint, Hunter and Frank Divitto. In September 2017, the Court granted defendants’ motion to dismiss the First Amended Complaint with leave to replead, concluding, as relevant to defendant UBS, that plaintiffs had failed to allege an injury for purposes of Article III standing, failed to plausibly allege an antitrust conspiracy against any defendant except Royal Bank of Scotland, and that the RICO claims were impermissibly extraterritorial.

A Second Amended Complaint was filed in December 2017 and added plaintiffs Dennis and CalSTRS. The Second Amended Complaint also revealed—for the first time—that Sonterra, FrontPoint, and Hunter had been dissolved several years before the case was initiated and alleged that they had assigned their claims to Fund Liquidation Holdings. The Court granted defendants’ second motion to dismiss on the basis that the plaintiff entities lacked Article III standing because they had not existed at the time the complaint was filed.

The court dismissed plaintiffs’ Second Amended Complaint for lack of subject matter jurisdiction in 2019. The U.S. Court of Appeals for the Second Circuit subsequently vacated that decision in light of its holding in Fund Liquidation Holdings LLC v. Bank of America Corp., and remanded the action to the U.S. District Court of the Southern District of New York for further proceedings.

The plaintiffs then filed a Third Amended Complaint, which the defendant, UBS AG, moved to dismiss the on the grounds that plaintiffs lacked Article III standing to bring the claims they assert against UBS.

Because plaintiffs were never assigned the rights to bring the claims they assert, the defendant’s motion to dismiss the Third Amended Complaint was granted, the court ruled.

Trading dispute. According to court filings, two financial instruments were at issue in the case, both CHF derivatives: CHF futures contracts and CHF foreign exchange forwards. CHF futures contracts are standardized bilateral agreements that call for the purchase or sale of an underlying commodity on a certain future date, traded on exchanges like the Chicago Mercantile Exchange.

CHF foreign exchange forwards are also bilateral agreements, but instead of standardized terms, private parties directly negotiate customized terms in an over-the-counter transaction. The filing points out that while Dennis traded only futures contracts, Sonterra, FrontPoint, Hunter, and CalSTRS traded only FX forwards.

The type of financial instrument is relevant to the court’s decision because the APAs did not assign recovery rights arising from FX forwards.

The case is No. 1:15-cv-00871-SHS.

Judge: Stein, S.

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