Reuters: Regulatory News: U.S. credit union regulator sues global banks over LIBOR

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U.S. credit union regulator sues global banks over LIBOR Sep 24th 2013, 01:14 By Karen Freifeld NEW YORK, Sept 23 | Mon Sep 23, 2013 9:14pm EDT NEW YORK, Sept 23 (Reuters) - A U.S. credit union regulator on Wednesday sued 13 banks over alleged manipulation of LIBOR, claiming credit unions lost millions of dollars in interest income as a result of rate-rigging. The National Credit Union Administration brought the lawsuit against JPMorgan Chase & Co, Credit Suisse Group AG , UBS AG and 10 other international banks on behalf of five failed credit unions. The complaint, filed in U.S. District Court in Kansas, says the credit unions held tens of billions in investments and other assets that paid interest streams pegged to LIBOR. "The credit unions received less in interest income than they were otherwise entitled to receive," the lawsuit says, as a direct result of the conspiracy, which violated state and federal anti-trust laws. Spokesmen for JPMorgan Chase and Credit Suisse declined comment. UBS did not immediately respond to a request for comment. Over a dozen banks and brokerage firms have been investigated worldwide over alleged manipulation of LIBOR, the benchmark for setting interest rates around the globe. UBS last week agreed to pay about $1.5 billion in penalties to resolve criminal, civil and regulatory probes by the United States, Britain, Switzerland and Japan into alleged rate manipulation. Barclays Plc and Royal Bank of Scotland Group Plc have also reached settlements with authorities. Big banks already face a slew of LIBOR lawsuits by investors and some local governments over the alleged conspiracy. The banks are accused of artificially manipulating LIBOR between 2005 and 2010 by falsely reporting the interest rates at which they were able to borrow. LIBOR, which stands for the London Interbank Offered Rate, is the benchmark interest rate for trillions of dollars of credit cards, mortgages, student loans, variable interest-rate notes and other lending products. The five failed corporate credit unions are U.S. Central, Western Corporate, Members United, Southwest and Constitution. The case is National Credit Union Administration Aboard v. Credit Suisse Group AG, et al, U.S. District Court, District of Kansas. The other banks include Lloyds Banking Group Plc, Westlb AG, Royal Bank of Scotland, Cooperatieve Centrale Raiffeisen Boerenfleenbank B.A., The Norinchukin Bank, the Bank of Tokyo-Mitsubishi UFJ Ltd , HBOS Plc, Societe Generale SA and Royal Bank of Canada. Link this Share this Digg this Email Reprints

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