Woman Sues 12 Of The World’s Largest Banks Over Libor Rate Manipulation

In short, the pillars of finance are accused of illegally boosting Libor at the start of each month in order to inflate the interest rates (based on Libor and calculated at the beginning of the month) paid by as many as 100,000 mortgage holders, in what would seem to be the bilking of a pretty immense sum of money, CNBC reports:

A pensioner whose home was repossessed is taking on some of the world’s leading banks in the first known class-action lawsuit claiming that alleged Libor manipulation made mortgage repayments for thousands of Americans more expensive than they should have been. The subprime mortgages of Annie Bell Adams and her four co-lead plaintiffs were securitised into Libor-based collateralised debt obligations and sold by banks to investors.

The class action, filed in New York, alleges that traders at 12 of the biggest banks in Europe and North America – including Barclays, Bank of America and UBS – were incentivised to manipulate the London interbank offered rate to a higher rate on certain dates on which adjustable mortgage interest rates were reset. This resulted in homeowners paying more between 2000 and 2009, according to the complaint.

The plaintiffs, who could number 100,000, have lost thousands of dollars each, says their Alabama-based attorney, John Sharbrough. He declined to give a figure on the total damages his clients are seeking.

Traders’ emails were published as part of the Barclays settlement. One, referenced in the Alabama complaint, shows a trader asking for a higher Libor rate because “We’re getting killed on our [three-month] resets.”

A series of class actions have been filed in New York since banks disclosed they were being probed. Until now plaintiffs have been investors and municipalities, not homeowners.

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  • BuzzCoastin

    great move
    class action suits usually protect the defendants,
    screw the plaintiffs out of money and enrich the lawyers
    it’s the American Way