News

Freddie Mac sues 15 global banks over Libor-related losses

Freddie MacFreddie Mac, one of America’s government-controlled mortgage giants, recently filed suit against 15 of the largest global banks over losses resulting from the Libor-rigging scandal.

In a March 14 court filing made public on Tuesday, Freddie Mac filed suit against Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, HSBC, JPMorgan Chase and UBS, as well as the British Bankers’ Association over the recent scandal involving the rigging of Libor, a key interest rate used to price trillions of dollars’ worth of derivatives, France 24 reports.

Freddie Mac, which was bailed out in 2008 to prevent its collapse, said that it incurred more than $3 billion in losses resulting from the drop in Libor rates between 2007 and 2010, according to RT.

“Each defendant owed a duty to Freddie Mac to honestly and accurately report U.S. dollar Libor and not intentionally mislead Freddie Mac and others by secretly and collectively manipulating USD Libor for their gain and to the detriment of others in the financial markets,” Freddie Mac said, France 24 reports.

Since the Libor scandal came to light last June, several banks have been sued for their participation in the rate-rigging. Barclays paid $439 million to U.K. and U.S. regulatory authorities, and UBS and the Royal Bank of Scotland have also paid heavy fines for their participation in the scandal.

Comments are closed.