The banks, man. It is just one debacle after another with them. Now, U.S. homeowners are accusing a dozen European and North American banks of manipulating the financial benchmark known as the London interbank offered rate, or Libor. Libor is the average interest rate that international banks charge each other for short-term loans. It is calculated daily.
The lawsuit, filed in U.S. District Court in New York, claims that traders at these banks, which include Bank of America Corp., Citigroup Inc., the Royal Bank of Scotland Group Plc and Deutsche Bank AG, “unjustly enriched themselves” by fiddling with the rate. Then they were able to increase homeowners’ payments on adjustable rate loans and fill their pockets with the resulting profits.
The plaintiffs are seeking class-action status, trial by jury, an order blocking the banks from manipulating Libor and, of course, cold hard cash.
Read more at Bloomberg Businessweek.
For more InsideCounsel coverage of banks behaving badly, see below:
JPMorgan sued for fraud over mortgage securities
Bank of America pays $2.43 billion in shareholder suit settlement
Citibank denies charges that it concealed Dewey’s financial troubles from partners
Citigroup will pay $590 million in settlement related to financial crisis
