The National Credit Union Administration (NCUA) filed a lawsuit against 13 banks accusing them of manipulating LIBOR and citing that credit unions have lost millions of dollars in interest income due to rate rigging. Law suits were filed against JPMorgan Chase & Co. (NYSE:JPM), Credit Suisse Group AG (NYSE:CS), UBS AG (NYSE:UBS) and 10 other international banks, according to Reuters.
The lawsuit by NCUA, related to the LIBOR rigging, was filed in Kansas court.
Banks at fault
According to the lawsuit, credit unions were in possession of tens of billions of dollars in investments along with other assets that paid interest attached to LIBOR.
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“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.
NCUA Board Chairman Debbie Matz said that it is their responsibility to trail recoveries through every available source against those who are responsible for billions of dollars in losses to credit unions.
The credit unions that suffered losses are U.S. Central, Western Corporate, Members United, Southwest and Constitution.
Other banks who are accused and undergoing probing are Lloyds Banking Group Plc, Westlb AG, and 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 the Royal Bank of Canada (NYSE:RY) (TSE:RY).
There was no comment from JP Morgan, Credit Suisse and UBS over the lawsuit.
Previous settlements in LIBOR scandal
Banks and financial Institutions have allegedly manipulated LIBOR between 2005 and 2010 by misguiding the interest rates at which they were able to borrow.
Since the scandal broke out, many inquiries were conducted globally on various banks and brokerage firms over LIBOR rigging. London Interbank Offered Rate, or LIBOR, is the standard interest rate for trillions of dollars of credit cards, mortgages, student loans, variable interest-rate notes and other lending products.
In December of last year, UBS settled to pay $1.5 billion in penalties to resolve criminal, civil and regulatory probes by the United States, Britain, Switzerland and Japan associated with the rate rigging.
Other banks like Barclays PLC (NYSE:BCS) (LON:BARC) and Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) have also entered into a settlement with authorities. Various world class institutions are going through the cases filed by Investors and local government against LIBOR Rigging.