(Corrects name in 5th paragraph to Federal Housing Finance
Agency, from Authority)
By Karen Freifeld
NEW YORK, March 19 U.S. mortgage finance company
Freddie Mac is suing more than a dozen banks for
losses from the alleged manipulation of the benchmark interest
rate known as Libor.
Bank of America Corp, JPMorgan Chase & Co, UBS AG and Credit
Suisse Group AG are among the banks named as defendants in the
Freddie Mac, which invested in mortgage bonds and swaps tied
to U.S. dollar Libor, claims the banks colluded to rig the
benchmark from 2007 to 2010, according to the complaint, which
was filed March 14 in U.S. District Court for the Eastern
District of Virginia.
Freddie Mac sued for undetermined damages.
The inspector general of the Federal Housing Finance Agency,
which oversees Freddie Mac and Fannie Mae, said the two
government-controlled mortgage companies may have suffered more
than $3 billion in losses as a result of Libor manipulation,
according to an internal memo obtained by Reuters in December.
In the memo, the watchdog urged the companies' regulator to
consider legal action.
Bank of America, JPMorgan Chase, UBS, Credit Suisse and
other banks did not immediately respond to calls for comment or
declined to comment.
More than a dozen banks have been under scrutiny by
authorities in the United States, Japan and Europe over claims
they altered the Libor to hide financial problems and boost
Freddie Mac said it discovered the fraud and collusion when
Britain's Barclays admitted in June it submitted false Libor
submissions, according to the complaint. The bank agreed to pay
$453 million that month to settle with British and U.S.
UBS was fined $1.5 billion in December for fiddling with
interest rates, and Royal Bank of Scotland Group settled with
authorities for $612 million in February.
The case is The Federal Home Loan Mortgage Corporation v
Bank of America, U.S. District Court for the Eastern District of
(Reporting by Karen Freifeld; Editing by Richard Chang and