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Freddie Mac Sues Dozens over Rate-Rigging Losses

The story of the London Interbank Offered Rate (Libor) scandal added another chapter in March as Freddie Mac brought suit against ""Barclays"":http://group.barclays.com/home, ""Bank of America"":https://www.bankofamerica.com/, ""Citibank"":https://online.citibank.com/US/JPS/portal/Index.do, and several other institutions for investment losses related to alleged rate-rigging practices.

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The GSE filed March 14 against a dozen banks for ""punitive damages to the extent allowable by law"" as well as for the cost of attorneys and legal fees. A number for damages sought was not specified.

In its complaint, Freddie Mac asserts that each defendant in the suit ""owed a duty to Freddie Mac to honestly and accurately report USD LIBOR and not to intentionally mislead Freddie Mac and others by secretly and collectively manipulating USD LIBOR for their gain and to the detriment of others in the financial markets.""

It was ""first revealed"":https://themreport.com/articles/barclays-loses-two-more-as-scandal-embroils-bank-2012-07-03 in June 2012 that traders at some institutions had been involved from 2007 to 2010 in a rate manipulation scheme. Barclays was the first to admit its involvement in the scandal, paying $453 million in a settlement with authorities; since then, ""UBS"":http://www.ubs.com/us/en.html and ""Royal Bank of Scotland"":http://www.rbs.co.uk/personal.ashx have also paid for their own alleged roles.

In December, the ""Federal Housing Finance Agency Office of the Inspector General"":http://www.fhfaoig.gov/ (FHFA-OIG) ""revealed"":https://themreport.com/articles/report-fannie-and-freddie-may-have-lost-more-than-3b-in-rates-scandal-2012-12-20 Freddie Mac--along with Fannie Mae--may have lost upwards of $3 billion as a result of the rate-rigging. Responding to the office's urge to consider legal options, FHFA said at the time it had yet to substantiate any Libor-related losses.

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