The National Credit Union Administration (NCUA), a US federal financial regulator, has filed a lawsuit in the federal district court in Kansas against 13 international banks, including UBS and Credit Suisse over alleged manipulation of Libor.
The NCUA brought the lawsuit against JPMorgan Chase & Co, Credit Suisse Group, UBS and 10 other international banks on behalf of five failed credit unions.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The regulator claimed that the credit unions held tens of billions in investments and other assets that paid interest streams pegged to Libor.
The banks alleged manipulation has resulted in a loss of income from investments and other assets held by five failed corporate credit unions including U.S. Central, WesCorp, Members United, Southwest and Constitution.
The complaint charged that the alleged rate-rigging provided a secret and improper boost to the banks’ own financial trading positions, "allowing them to earn significant undeserved profits.
The banks were accused of artificially manipulating LIBOR between 2005 and 2010 by falsely reporting the interest rates at which they were able to borrow.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThe NCUA claims the defendants in the action gave false interest-rate information to benefit their investments that were tied to LIBOR, to reduce their borrowing costs, to deceive the marketplace as to the true state of their creditworthiness, and to deprive investors of the interest rate payments to which they were entitled.
The alleged manipulation has also enabled them to portray themselves to the marketplace as financially healthier and more liquid than they actually were.
Debbie Matz NCUA Board Chairman said: "We have a responsibility to pursue recoveries through every available avenue against those who caused billions of dollars in losses to credit unions."
