BofA, Citigroup, Credit Suisse, RBS sued by FDIC in Libor rigging

Bank of America Corp., Citigroup Inc. and Credit Suisse Group AG were among 16 of the world’s biggest banks sued by the U.S. Federal Deposit Insurance Corp. for allegedly manipulating the London interbank offered rate from 2007 to 2011. More

To continue reading this article, please do one of the following.



banking

BofA, Citigroup, Credit Suisse, RBS sued by FDIC in Libor rigging

BLOOMBERG FILE PHOTO/JIN LEE
BANK OF AMERICA Corp. is one of 16 banks being sued by the U.S. Federal Deposit Insurance Corp. for allegedly manipulating the London interbank offered rate, or Libor. The FDIC, which filed the suit Friday, claimed the institutions "fradulently and collusively suppressed" the U.S. Libor rate.
Posted 3/14/14

NEW YORK – Bank of America Corp., Citigroup Inc. and Credit Suisse Group AG were among 16 of the world’s biggest banks sued by the U.S. Federal Deposit Insurance Corp. for allegedly manipulating the London interbank offered rate from 2007 to 2011.

The FDIC, acting as receiver for 38 failed banks including Washington Mutual Bank, IndyMac Bank FSB and Colonial Bank, claimed that institutions sitting on the U.S. dollar Libor panel “fraudulently and collusively suppressed” the U.S. Libor rate. Also named in the suit, filed Friday in Manhattan federal court, is the British Bankers Association, an industry group.

The failed banks “reasonably expected that accurate representations of competitive market forces, and not fraudulent conduct or collusion,” would determine the benchmark, the FDIC said in its complaint.

Regulators around the world have been probing whether firms colluded to manipulate interest-rate benchmarks including Libor, which affects more than $300 trillion of securities worldwide. Financial institutions have paid about $6 billion so far to resolve criminal and civil claims in the U.S. and Europe that they manipulated benchmark interest rates.

The cost for global investment banks could climb to $46 billion, analysts at KBW, a unit of Stifel Financial Corp., said in a report last year. JPMorgan Chase & Co. and HSBC Holdings PLC may face a European Union complaint as soon as next month from the bloc’s antitrust chief.

Investigators claim the banks altered submissions used to set the benchmark to profit from bets on interest-rate derivatives or to make the lenders’ finances appear healthier.

Higher prices

In the suit filed on Friday, the FDIC claimed the fixed rates caused the failed banks to pay higher prices for Libor-based financial products and to get lower interest payments from the defendants and others.

The FDIC alleges the banks committed fraud and violated U.S. antitrust laws in fixing the U.S. dollar Libor benchmark. It seeks unspecified damages on behalf of the failed banks, including punitive damages and triple damages for price-fixing.

Drew Benson, a spokesman for Credit Suisse, Lawrence Grayson, a spokesman for Charlotte, N.C.-based Bank of America, and Mark Costiglio, a Citigroup spokesman, declined to comment on the suit. FDIC spokesman David Barr also declined to comment.

The case is Federal Deposit Insurance Corp. v. Bank of America Corp., 14-cv-01757, U.S. District Court, Southern District of New York (Manhattan).

Calendar
PBN Hosted
Events

Join PBN for the best networking event and party of the winter - January 15, 2015 - the Book of Lists Party at the Providence Public Library. Reserve your spot by December 31st and get a holiday gift from PBN!
  • Best Places to Work
    Enrollment is now open for the 7th annual Best Places to Work program. Winners w ...
  • Manufacturing Awards
    Applications are now being accepted for the 2nd Annual Manufacturing Awards. Dea ...
Advertisement
Purchase Data
Book of Lists
Lists
Book of Lists cover
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.
Data icons
Data can be purchased as single lists, in either Excel or PDF format; the entire database of the published book, in Excel format; or a printed copy of the Book of Lists.
  • Purchase an e-File of a single list
  •  
  • Purchase an e-File of the entire Book of Lists database
  •  
  • Purchase a printed copy of the Book of Lists
  •  
    National
    Local
    Latest News
    Advertisement