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

  • Furthermore. . .
    Nine of the ten cities where people feel least safe walking at night are in the south or in California 25 greenest cities Global nonviolent action database […]
  • Today in history
    Today in history 1912 -- Titanic sinks at 2:20am. Harry Elkins Widener goes down clutching his 1598 edition of Bacon's Essays. Most Americans these days think it is just a movie.  1967 -- US: First mass burning of draft cards as 400,000 march in New York City & 80,000 in San Francisco opposing the Vietnam War. Daily Bleed […]
  • Morning Line: Of hate crimes and traitors
    Sam Smith - The recent killings in Kansas City has revived talk of hate crimes. The problem with having a category of hate crimes is that there is no constitutional prohibition against hating, rotten as it may be. In fact, the right to be wrong is one of the most basic concepts behind our constitution. If you do something illegal, you are to be caught and pu […]
  • Studies: America is an oligarchy, not a democracy
    Gawker - A new study by researchers from Princeton and Northwestern Universities finds that America's government policies reflect the wishes of the rich and of powerful interest groups, rather than the wishes of the majority of citizens.The researchers examined close to 1,800 U.S. policy changes in the years between 1981 and 2002; then, they compared th […]
  • Some ideas we don't even talk about
    Alternet - Venezuela has increased its maternity leave to 6.5 months. In addition, Venezuela pays full-time mothers a pension. This 2012 labor law also outlawed outsourcing, and made it difficult to fire people.Brazil is another Latin American country that has perks for workers. Along with Lithuania, Brazil offers the most paid vacation days in the world: 41 […]
  • Colleges and universities in serious financial trouble
    Zero Hedge - Soaring student debt, competition from online programs and poor job prospects for graduates are shrinking the applicant pools for many universities and, as Bloomberg reports, the National Association of Independent Colleges and Universities warns "there will clearly be some institutions that won’t make it...through these difficult steps. […]
  • Stats: America's prisons
    Policy Mic The United States has 5% of the world's population, but 25% of the world's prisoners.The total incarcerated population in the U.S. is 2.4 million — a 500% increase over the past 30 years. One in 28 American children has a parent behind bars.  Currently, 65 million Americans have a criminal record.There are more people behind bars today f […]
  • Pocket paradigms
    Journalism has never been the art of the ideal. Its basic problem is that it attempts to perpetrate the truth, relying for financial support advertisers who have little interest in the pursuit of this goal. It's a bit like a priest being supported by the proceeds of a whorehouse. .- Sam Smith […]
  • Word
    The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum - even encourage the more critical and dissident views. That gives people the sense that there's free thinking going on, while all the time the presuppositions of the system are being reinforced by […]
  • Furthermore. . .
    Meanwhile. . . Trade workers unions and coops: the story so far Sears is dying People participating in the food stamp program outnumbered the women who worked full-time, year-round in the United States in 2012, according to data from the Department of Agriculture and the Census Bureau. In the Mad Men era college tuition averaged $478, but a computer cost $4. […]
  • One reason Comcast is getting away with seizing our airwaves
    The phrase anti-trust is disappearing from our discourseUse of the phrase anti-trust in books 1800 to present […]
  • Rare senator who's not afraid to challenge the Comcast disaster
    The Hill - Sen. Al Franken (D-Minn.) said that Comcast's plans to purchase Time Warner Cable would harm competition and raise prices in cable television and broadband internet.Franken, one of Capitol Hill's most vocal opponents of the merger, did not mince words in describing his opposition to CNN's Brian Stelter."This is the No. 1 cable […]
  • Hil Clin acted as Boeing marketer while Secretary of State
    Washington Post - On a trip to Moscow early in her tenure as secretary of state, Hillary Rodham Clinton played the role of international saleswoman, pressing Russian government officials to sign a multibillion-dollar deal to buy dozens of aircraft from Boeing.A month later, Clinton was in China, where she jubilantly announced that the aerospace giant would b […]
  • Federal judge rules Ohio gay marriage ban unconstitutional
    Buzz Feed - U.S. District Court Judge Timothy Black  ruled that Ohio’s ban on recognizing the out-of-state marriages of same-sex couples is unconstitutional — a move he announced in court earlier this month that he would be taking.“The record before the Court … is staggeringly devoid of any legitimate justification for the State’s ongoing arbitrary discrimin […]
  • Where to put bike lanes
    538 - Bike lanes don’t cause a lot more congestion if you put them on the right streets. If you cut down the size of streets that are already near capacity, you’ll create severe congestion. But if you start with roads that are well under capacity, you’ll only increase the congestion a little bit. And it may not even be noticeable. Slimming down these roads t […]