UC Regents, San Diego governments launch LIBOR lawsuit
SAN FRANCISCO (Reuters) - The Regents of the University of California and the San Diego Association of Governments filed lawsuits in federal courts on Tuesday against more than 20 current and former financial institutions, alleging that they manipulated the London Interbank Offered Rate.
The suits allege financial damages linked to deception regarding the benchmark LIBOR interest rate, said Nanci Nishimura, a partner at the law firm Cotchett, Pitre & McCarthy working both lawsuits.
"They all colluded behind our backs and agreed with each other that they would lie and report a different rate," Nishimura said.
"Hard working taxpayers got cheated," Nishimura said. "If they were getting a lower interest rate, they were getting less money than they should have. If they were involved with an instrument where the interest rate was inflated then they could have been paying too much."
According to the UC Regents complaint, the financial institutions acted "in concert to knowingly overstate and understate their true borrowing costs," causing LIBOR to be calculated artificially and they "reaped hundreds of millions, if not billions, of dollars in illegitimate gains."
Nishimura said it is too early to gauge the damages her firm's clients suffered.
The Cotchett firm filed similar lawsuits in January against the financial institutions on behalf of the East Bay Municipal Utility District, County of San Mateo, the San Mateo County Joint Powers Financing Authority, City of Richmond, City of Riverside, the Riverside Public Financing Authority and the County of San Diego.
The UC Regents filed its lawsuit in U.S. District Court in San Francisco. The San Diego-area association filed its lawsuit in U.S. District court in San Diego.
The two suits allege violations of U.S. and California antitrust laws and name the following institutions as defendants: Continued...