| NEW YORK
NEW YORK U.S. mortgage finance company Freddie Mac FMCC.OB 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 lawsuit.
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.
The banks worked together to artificially lower the U.S. dollar Libor "both to hide their institutions financial problems and to boost their profits," the complaint said. The lawsuit seeks undetermined damages.
Freddie Mac and Fannie Mae, the two government-controlled mortgage companies, may have suffered more than $3 billion in losses as a result of Libor manipulation, according to a memo obtained by Reuters in December.
The memo was sent to the Fannie and Freddie's regulator, the Federal Housing Finance Agency, by its inspector general. The watchdog urged the 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.
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. authorities.
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.
Libor rates are calculated by asking banks the level they can expect to borrow from other banks.
The Libor rates submitted by banks for different currencies are compiled by Thomson Reuters, parent company of Reuters, on behalf of the British Banking Association, which also is a defendant in the lawsuit.
The trade association could not be reached after hours for comment.
The case is The Federal Home Loan Mortgage Corporation v Bank of America, U.S. District Court for the Eastern District of Virginia 13-cv-00342.
(Reporting by Karen Freifeld; Editing by Richard Chang and Michael Perry)