NEW YORK (REUTERS) - US mortgage finance company Freddie Mac is suing more than a dozen banks for losses from the alleged manipulation of the benchmark interest rate known as Libor.
Bank of America Corp, JPMorgan Chase and Co, UBS AG and Credit Suisse Group AG are among the banks named as defendants in the lawsuit.
Freddie Mac, which invested in mortgage bonds and swaps tied to US dollar Libor, claims the banks colluded to rig the benchmark from 2007 to 2010, according to the complaint, which was filed on March 14 in US District Court for the Eastern District of Virginia.
Freddie Mac sued for undetermined damages.
The inspector general of the Federal Housing Finance Authority, which oversees Freddie Mac and Fannie Mae, said the two government-controlled mortgage companies may have suffered more than US$3 billion (S$3.76 billion) in losses as a result of Libor manipulation, according to an internal memo obtained by Reuters in December.
In the memo, the watchdog urged the companies' regulator to consider legal action.
More than a dozen banks have been under scrutiny by authorities in the United States, Japan and Europe over claims that they altered the Libor to hide financial problems and boost profits.
Freddie Mac said it discovered the fraud and collusion when Britain's Barclays admitted in June that it submitted false Libor submissions, according to the complaint. The bank agreed to pay US$453 million that month to settle with British and US authorities.
UBS was fined US$1.5 billion in December for fiddling with interest rates, and Royal Bank of Scotland Group settled with authorities for US$612 million in February.