UPDATE 1-Freddie Mac sues more than a dozen banks over Libor
By Karen Freifeld
NEW YORK, March 19 (Reuters) - U.S. 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 & 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 U.S. dollar Libor, claims the banks colluded to rig the benchmark from 2007 to 2010, according to the complaint, which was filed March 14 in U.S. District Court for the Eastern District of Virginia.
The banks worked together to artificially lower the U.S. dollar Libor "both to hide their institutions financial problems and to boost their profits," the complaint said. The lawsuit seeks undetermined damages.
Freddie Mac and Fannie Mae, the two government-controlled mortgage companies, may have suffered more than $3 billion in losses as a result of Libor manipulation, according to a memo obtained by Reuters in December.
The memo was sent to the Fannie and Freddie's regulator, the Federal Housing Finance Agency, by its inspector general. The watchdog urged the regulator to consider legal action.
Bank of America, JPMorgan Chase, UBS, Credit Suisse and other banks did not immediately respond to calls for comment or declined to comment. Continued...