Federal Home Loan Mortgage Corp (OTC:FMCC) sues multiple banks for manipulating Libor- BAC, JPM

Posted On 21 Mar 2013

Tag: Bank of America Corp(NYSE:BAC), Federal Home Loan Mortgage Corp (OTC:FMCC), JPMorgan Chase & Co (NYSE:JPM), NYSE:BAC, NYSE:JPM, OTC:FMCC

Northern, WI 03/21/2013 (avauncer) - Federal Home Loan Mortgage Corp (OTC:FMCC) ( Current: $1.08, Up by 54.33%) has sued Bank of America Corp (NYSE:BAC) (Current: $12.78, Up by 0.55%), JPMorgan Chase & Co (NYSE:JPM) (Current: $49.12, Down by 0.16%), UBS AG (UBSN) as well as twelve other banks. They have alleged that the London Interbank offered Rate has been manipulated by them which has led to face substantial financial losses. According to the complaint filed in an Alexandria, Virginia Federal Court, the banks have been hiding their financial issues in an effort to boost their profits and have collectively held down the U.S dollar Libor.

Ongoing scandal

The complaint lodged by Federal Home Loan Mortgage Corp (OTC:FMCC)

lists 15 different banks and well as banks belonging to the British Bankers’ Association. Banks such as Citigroup Inc (NYSE:C) (Current: $46.09, Up by 0.66%), Barclays PLC (NYSE:BCS) ( Current: $17.95, Down by 0.28%), Royal Bank of Scotland Group plc (NYSE:RBS) (Current:$9.07, Up by 2.14%), Royal Bank of Canada (NYSE:RY) ( Current: $59.75, Up by 0.52%), Deutsche Bank AG (NYSE:DB) ( Current: $41.90, Up by 0.53%) as well as Credit Suisse Group AG (NYSE:CS) ( Current $27.18, Up by 0.33%) are part of the association. Few of the world’s biggest banks have been manipulating interest rates. They all are now being scrutinized by 6 agencies in across three continents. This has now become the banking industry’s biggest and lengthiest scandal.

Heavy losses

Libor is associated with over $300 million worth of mortgages, loans, contracts and financial products. Freddie Mac and the Fannie Mae, its Washington-based sister company could have incurred losses of upto $3 billion due to the Libor manipulation said an auditor of FHFA in Nov. The banks have now been accused of frauds, breach of contract and violations of the anti-trust law and the housing financer seeks treble damages and punitive damages for violating the Sherman Act as well as unspecified damages relating to financial harm. Both Freddie Mac and Frannie Mae make the use of Libor in determining interest payments on investments they have.

About the Author

Karen Kinsey with a degree in journalism. She ended up going into the education field and has been a teacher for the past six years. Karen Kinsey is a television producer, writer, editor, professor, wife, mother, sister, daughter, friend and longtime, diehard Phillies fan. Karen Kinsey writings have been featured in such mainstream media as The Guardian, USA Today, Global Times, China Daily, Beijing Review, among others.