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Houston Files Lawsuit Against Banks For Interest Rate Manipulation

CICELY MITCHELL, CBS Houston
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File photo of money.(Photo Credit: KAREN BLEIER/AFP/Getty Images)

File photo of money.(Photo Credit: KAREN BLEIER/AFP/Getty Images)

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HOUSTON (CBS Houston) In a statement issued Tuesday, the City of Houston has filed a lawsuit against 16 major banks, citing interest rate manipulation.

According to the City of Houston, the suit was filed Tuesday, “…for financial damages suffered from the manipulation of the interest rates on its investments against the banks that set the benchmark interest rate known as the London Interbank Offered Rate, or LIBOR,” stated city officials.

“The lawsuit was filed in federal court in the Southern District of Texas by Richard Mithoff, of Mithoff Law Firm, the California law firm Cotchett, Pitre & McCarthy, LLP, and the Houston law firm The Chevalier Law Firm, PLLC, against more than 16 current and former financial institutions that set LIBOR, including Barclays, UBS, Bank of America, Royal Bank of Scotland, JP Morgan, and Citigroup,” added the City of Houston.

Houston Mayor Annise Parker stated that the lawsuit filed from the city is one that has tremendous merit and highlights the erroneous practices by several financial institutions: “I have instructed the city legal department to aggressively pursue any monies owed the city,” said Mayor Annise Parker. “Any manipulation of rates paid by the taxpayers must be corrected.”

According to the City of Houston,” LIBOR is the world’s benchmark interest rate used for setting short-term interest rates on a wide range of financial instruments– from simple consumer car loans to complex municipal derivative investments by public entities. LIBOR-based investments are in the trillions of dollars annually.”

Click here to read more about the lawsuit filed by the City of Houston against 16 major banks.

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