Member access

4-Traders Homepage  >  Shares  >  London Stock Exchange  >  Barclays PLC    BARC   GB0031348658

BARCLAYS PLC (BARC)

116
SummaryQuotesChart AnalysisNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 

New York lender sues big banks over alleged Libor manipulation

07/30/2012 | 09:20am US/Eastern
Recommend:
0

(Reuters) - A New York lender has sued a group of large banks on the panel that sets a key global interest rate, saying it was cheated out of interest income through alleged rate manipulation.

The lawsuit, filed last week in District Court in Manhattan, seeks class-action status on behalf of similar lenders.

Berkshire Bank, which is not connected to Warren Buffett's Berkshire Hathaway (>> Berkshire Hathaway Inc.), says borrowers were able to take advantage of artificially low interest rates because of the big banks' "unlawful suppression" of benchmark rates.

Defendants named in the suit include Bank of America Corp (>> Bank of America Corp), Barclays Plc (>> Barclays PLC), JPMorgan Chase & Co (>> JPMorgan Chase & Co.) and Citigroup Inc (>> Citigroup Inc.).

At least one other community bank has filed similar legal claims, a sign that the rate manipulation scandal is having a broad impact. The Community Bank & Trust of Sheboygan, Wisconsin, said in a lawsuit several months ago that alleged rate rigging had kept its interest margins artificially low. That lawsuit also is pending in District Court in Manhattan.

Berkshire Bank had $854 million in assets at the end of last year, according to its website. It has 10 branches in New York and one in New Jersey.

The reliability of the London interbank offered rate, or Libor, which underpins transactions worth trillions of dollars, has been rattled by the rate manipulation accusations. Libor is used to set interest rates on credit cards, student loans and mortgages.

Big banks already face an array of Libor lawsuits by some big investors and local governments. Bank defendants have said in court papers seeking dismissal of these lawsuits that plaintiffs have failed to show banks acted to restrict competition, even if rates were improperly stated.

Berkshire Bank said in court papers dated July 25 that a misrepresentation in the referenced U.S. dollar Libor rate on the date on which a loan resets will generally reduce the lender's interest income.

"It was not only foreseeable but obvious that by manipulating the rate of U.S. dollar Libor, defendants would impair the interest income received by plaintiff and other lenders providing U.S. dollar Libor-tied loans," Berkshire said.

The case is Berkshire Bank vs. Bank of America Corp and others, Case No. 12-5723, U.S. District Court, Southern District of New York.

(Reporting by Sakthi Prasad in Bangalore; Additional reporting by Jonathan Stempel in New York; Editing by Martha Graybow and Lisa Von Ahn)

Recommend :
0
React to this article
Latest news on BARCLAYS PLC
1d ago BARCLAYS' : dates for the 2014 Annual General Meeting, Q1 2014 Interim Managemen..
1d ago BARCLAYS : and OFI Global Asset Management will partner to launch the Barclays O..
1d ago BARCLAYS : shares soaring as workforce dwindles
1d ago BARCLAYS : Cuts threat at Barclays
2d ago BARCLAYS : Banking: Thousands more jobs may go at Barclays
2d agoDJEUROPE MARKETS : European Stocks Turn Higher, But Rémy, Diageo Lag
2d agoDJLONDON MARKETS : U.K. Stocks Rise To One-week High; Barclays Jumps
2d agoDJLONDON MARKETS : U.K. Stocks Rise To One-week High; Barclays Jumps
2d agoDJEuropean Stocks Turn Higher, But Remy, Diageo Lag
2d agoDJEUROPE MARKETS : European Stocks Turn Higher, But Rémy, Diageo Lag
Advertisement
Chart
Duration : Period :
Barclays PLC Technical Analysis Chart | BARC | GB0031348658 | 4-Traders
Income Statement Evolution
Barclays PLC : Income Statement Evolution
More Financials
Dynamic quotes  
ON
| OFF