Fannie Mae sues big banks for alleged LIBOR misdeeds

November 01, 2013 03:56PM

Fannie Mae has filed suit against nine banks, including Bank of America and JPMorgan Chase, for working to suppress the London interbank offered rate, commonly known as LIBOR.

The alleged suppression of key benchmarks such as LIBOR, Fannie Mae alleges, has lead to a $332 million loss on interest rate swaps with Barclays, UBS, Royal Bank of Scotland, Deutsche Bank, Credit Suisse, Bank of America, Citigroup and JPMorgan.

“Defendants initially took these and other overt acts described above to further the corrupt agreement between them and to carry out a common plan to execute a fraud on Fannie Mae and to benefit defendants,” Fannie Mae said in the complaint.

Eight of the nine banks targeted in the suit also face breach of contract and breach of implied duty of good faith and fair dealing claims. All were sued for common law fraud, and aiding and abetting.

Fannie Mae aims to secure consequential damages, punitive damages, prejudgment interest and attorneys’ fees in the suit.

Representatives for Deutsche Bank, UBS, JPMorgan, Citigroup, Barclays, Credit Suisse and RBS declined to comment on the suit. A Bank of America spokesman did not immediately return a call from Bloomberg seeking comment.

Freddie Mac sued several banks back in March on similar charges. [Bloomberg News]Julie Strickland