Categorized | Crime, National

California Counties Claim LIBOR-Rigging Cost Them Millions

 

What’s in Your Wallet?

 

Skippy Massey
Humboldt Sentinel

 

 Eight California counties and public entities sued UBS Bank, Barclays Bank, Bank of America, Citibank, JP Morgan Chase, and other banks alleging they defrauded
and lost millions of dollars because the financial institutions
manipulated, fixed, and lied about the benchmark LIBOR rate.

bag of moneyComplaints were filed today in federal court in Los Angeles, San Francisco and San Diego on behalf of the counties of San Diego and San Mateo, the city of Riverside, the city of Richmond, and four other entities against 22 current and former banks that set LIBOR rates, law firm Cotchett Pitre & McCarthy LLP said in a statement.

The lawsuits filed today allege violations of antitrust laws, negligence and unjust enrichment and seek to recover losses and triple damages.  The plaintiffs claim they were cheated out of higher interest payments on investments such as interest-rate swaps and corporate bonds tied to LIBOR.

libor2LIBOR, or the “London Interbank Offered Rate,” is the world’s benchmark interest rate used for setting short-term interest rates on a wide range of financial instruments – from simple car loans, mortgages, student loans, and credit cards to complex municipal derivative investments by public entities.

LIBOR-based investments are in the trillions of dollars every year.  About 90 percent of US commercial and mortgage loans are linked to the index

LIBOR is based on a self-reporting British Bankers’ Association daily survey that asks lenders to estimate
and average how much it would cost to borrow money from each other for various periods in 10 different currencies.  It is accepted by the global financial system as the true cost of borrowing between financial institutions because it was believed to represent the true interest rate at which borrowers are able to borrow money.

lie boreJohn C. Beiers, County Counsel for San Mateo County, said in the statement Wednesday, “LIBOR was manipulated on a global scale, and it’s a sad fact that the rigging of LIBOR is just another outrageous example of how self-regulated financial markets take advantage of average hardworking people and Main Street public entities.”

San Mateo County Supervisor Don Horsley added, “It’s the local taxpayers and those that need services such as healthcare that suffer when these global institutions think only about their bottom line, and nothing about who they might harm.  We are going to aggressively pursue this lawsuit and others to ensure that these faceless and heartless
institutions do not benefit at the expense of those in need.”

Banks already face 30 lawsuits by U.S. homeowners and other plaintiffs seeking to hold them responsible for alleged manipulation of the rate used as a borrowing-cost benchmark.  A class-action lawsuit filed in Manhattan in October by homeowners alleges a conspiracy among financial institutions drove up the cost of mortgage loans.

fixed ratesBarclays Bank last year settled criminal allegations of fixing LIBOR rates, leading to multiple lawsuits and investigations of major banks on at least two continents.

Between 2005 and 2007, Barclays, UBS and other banks systematically conspired and inflated their borrowing cost estimates to the LIBOR board in order to drive up the LIBOR rate and increase their profits on derivatives linked to it.  After 2007, when the global financial crisis intensified, the banks lowballed their submissions to LIBOR in order to mask their financial weaknesses and lower their borrowing costs.

By manipulating the rate upward, the banks robbed countless millions of people of billions of dollars in inflated loan costs.  By manipulating the rate downward, they deprived states, cities, pension funds and retirees with fixed investments of untold billions in revenues from bond holdings.

* * * * * * * *

If you haven’t heard of LIBOR– or the LIBOR scandal yet– you will.  It’s a very, very big deal.  Knowledgeable insiders are begging the question as to whether US interest rates have been equally and similarly fixed.

There has been so much crime, collusion, and corruption lately between banks and Wall Street it’s been hard to keep up, friends.  Greed and gluttony have no boundaries, few regulations, and even fewer still have gone to jail.

Corruption is worse than prostitution.  The latter might endanger the morals of an individual, but the former invariably endangers the morals of entire institutions.

(Posted by Skippy Massey)

Leave a Reply

HumSentinel on Twitter

RSS Progressive Review

  • Great moments with Hillary Clinton
    State Department spokeswoman  can't think of any Hillary Clinton achievementsBut then the best HRC can come up with is "stabilization" or something […]
  • Furthermore. . .
    Watch the state by state incarcertation rate grow from 1978 to 2012 All four Republican candidates in the North Carolina Senate race were asked on Earth Day if they believed climate change is a proven fact. And all four candidates said 'no. […]
  • How to become a Nobel Prize winner: Eat chocolate
    This story is two years but too self-serving to forgetReuters -  Of all the chocolate research out there, the most unabashed tribute to the "dark gold" has to be a study just published in one of the world's most prestigious medical journals.The higher a country's chocolate consumption, the more Nobel laureates it spawns per capita, accord […]
  • Taxpayers subsidize Walmart and the Walton family by $7.8 billion a year
    AFL- CIO - A new report from Americans for Tax Fairness shows that taxpayers in the United States subsidize Walmart and the Walton family, who owns the majority of Walmart stock and is the richest family in the country, by at least $7.8 billion annually. At the same time, the report shows, taxpayers help pad Walmart and the Walton family's profits.The r […]
  • Yes, the cowboys and the Indians can be friends
    DC Media Group-    [A] campsite by the Cowboy Indian Alliance for a week-long protest against the Keystone XL pipeline began on the National Mall in Washington, DC . . .So far seven tipis standing 20 feet tall have been assembled with one in progress and more to go up tomorrow. Several will be painted with ceremonial tribal designs as the week progresses.Ran […]
  • John Kerry: Secretary of Buffoonery
    Justin Raimando, Anti-War -  Oh, the burden of empire! It weighs so heavily on John Kerry’s shoulders:"Secretary of State John Kerry attested Tuesday to the massively complex challenges Washington faces in Ukraine, Russia, Iran and the Middle East, declaring ‘it was easier’ during the Cold War."In a candid moment during a State Department speech, t […]
  • USAID bribes foreign officials
    Jonathan Turley, Information Clearinghouse -  Congressional members are moving to address what is being called a “slush fund” with the United States Agency for International Development ) where millions are paid to political figures in foreign countries. We have previously discussed such payments by the CIA to the openly corrupt Afghanistan government, inclu […]
  • Supreme Court says all it takes is an anonymous 911 call to abolish 4th Amendment
    Slashdot -  The U.S. Supreme Court ruled that police officers are legally allowed to stop and search vehicles based solely on anonymous 911 tips. Justice Clarence Thomas, writing for the majority opinion, reasoned that 'a 911 call has some features that allow for identifying and tracking callers' as well as for recording their calls, both of which […]
  • Chances are your vegatable oil is genetically modified
    Mother Jones - Soybeans are the second-largest US crop after corn, covering about a quarter of US farmland. We grow more soybeans than any other country except Brazil. According to the US Department of Agriculture, more than 90 percent of the soybeans churned out on US farms each year are genetically engineered to withstand herbicides, nearly all of them inv […]
  • The FBI's illegal mistreatment of American Muslims
    Kevin Gosztola, Firedog Lake - A lawsuit brought on behalf of four American Muslim men has been filed against the FBI for allegedly punishing them by placing them on the No Fly List when they refused to become informants and spy on American Muslim communities.According to the complaint, the American Muslim men are “among the many innocent people who find the […]
  • Department of Good Stuff: Community Courts
    Center for Court Innovation  - Community courts are neighborhood-focused courts that attempt to harness the power of the justice system to address local problems. They can take many forms, but all focus on creative partnerships and problem solving.. And they test new and aggressive approaches to public safety rather than merely responding to crime after it h […]
  • The phlosophy of donut holes
    Improbable Research - In 2001, professor Achille C. Varzi, of Columbia University, New York, very probably became the first philosopher to author a paper focusing specifically on the ramifications of holes in donuts, as we reported. In 2012 the subject received further attention, this time from professor Stephen Barker and Mark Jago at the philosophy departm […]
  • Pocket paradigms: The Mid East
    The most misleading myth about the Middle East is that an end to violence is a necessary precondition to peace negotiations. An end to violence should rather be one the goals of peace negotiations. Killings emphasize the need for such talks rather than serving as justification for avoiding them. If what goes on in the synagogue doesn't stay in the synag […]
  • Word
    Implicit in the term `national defense' is the notion of defending those values and ideals which set this nation apart -- Justice Potter Stewart, 1967 The problem in defense is how far you can go without destroying from within what you are trying to defend from without. -- Dwight Eisenhower […]
  • Today in history
    1932 -- Jim Fixx, author of Complete Book of Running, which kick-started the 1970s jogging craze, lives. He fixated on running until his bum ticker seized up like a rusty chain saw. At age 52, Fixx walks out of house & begins jogging. Goes a short distance when he has a massive coronary: His autopsy reveals one coronary artery 99% clogged, another 80% ob […]