Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Alleging Libor Rigging, Freddie Mac Sues More Than a Dozen Banks

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Alleging Libor Rigging, Freddie Mac Sues More Than a Dozen Banks

Article excerpt

WASHINGTON -- Freddie Mac sued Bank of America, UBS AG, JPMorgan Chase & Co. and a dozen other banks over alleged manipulation of the London interbank offered rate, saying the mortgage financier suffered substantial losses as a result of the companies' conduct.

Government-owned Freddie Mac accuses the banks of acting collectively to hold down the U.S. dollar Libor to "hide their institutions' financial problems and boost their profits," according to a complaint filed in federal court in suburban Alexandria, Va.

"Defendants' fraudulent and collusive conduct caused USD LIBOR to be published at rates that were false, dishonest, and artificially low," Richard Leveridge, a lawyer for Freddie Mac, said in the complaint, which was made public Tuesday.

Manipulation of interest rates by some of the world's biggest banks has spawned probes by half a dozen agencies on three continents in what has become the industry's largest and longest- running scandal. More than $300 trillion of loans, mortgages, financial products and contracts are linked to Libor.

Libor is calculated by a poll carried out daily by Thomson Reuters on behalf of the British Bankers' Association, an industry lobby group that asks firms to estimate how much it would cost to borrow from each other for different periods and in different currencies. …

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