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Sacramento County sues big banks, alleging rate manipulation...LIBOR
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[link to www.sacbee.com]
Sacramento County waded into a massive global financial scandal over interest rates Tuesday, accusing some of the world's largest banks of rigging interest rates to maximize their profits at the county's expense.
The county sued Bank of America, Citigroup, Deutsche Bank and 15 others, saying they cost Sacramentans untold sums by manipulating the London Interbank Offered Rate, or Libor – a kind of super interest rate. Libor is arguably the world's most influential interest rate, a benchmark against which trillions of dollars in loans and other transactions are set.
The Libor scandal, which exploded about a year ago, has become one of the biggest financial frauds of recent times. Criminal charges have been filed, and three top banks – UBS, Barclays and Royal Bank of Scotland – have paid U.S. and British regulators fines totaling $2.6 billion. Barclays' CEO resigned over the matter.
Sacramento County is just the latest government agency to claim injury from manipulation of the Libor rate. More than a dozen California cities and counties, plus the UC system, have already filed lawsuits similar to Sacramento County's, seeking damages from the banks.
"This is a case of enormous magnitude," said Nanci Nishimura of Cotchett Pitre & McCarthy, a Burlingame law firm representing Sacramento County and the other California government agencies. "Libor … is used around the world to set interest rates. Libor permeates through every f
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